FILE PHOTO: An aerial photo shows Boeing 737 MAX airplanes parked on the tarmac at the Boeing Factory in Renton, Washington
(Reuters) – Boeing Co said on Tuesday it handed over 56% fewer airplanes in May, compared with a year earlier, as deliveries of its top-selling 737 MAX jet remained suspended following a deadly crash in March.
Total deliveries fell to 30 planes, compared with 68 in 2018. Net orders for the first five months remained in negative territory, with a total of minus 125 net orders.
The company has been facing its worst ever crisis after an Ethiopian Airlines’ 737 MAX plane crashed, killing all 157 people on board, in the second fatal accident involving the jet in just five months.
Boeing reiterated on Sunday it was working with global regulators to certify a software update for the jet as well as related training and education material to safely return the plane to service.
Global airlines that had rushed to buy the fuel-efficient, longer-range aircraft have since canceled flights and scrambled to cover routes that were previously flown by the MAX.
European rival Airbus SE delivered 81 aircraft in May, up 59% from last year and 313 in the January-May period, a rise of 40%.
Boeing shares were down 0.6% at $351.44 in morning trade.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D’Silva)
SAO PAULO, May 9 (Reuters) – Brazilian airline Azul SA’s chief executive said on Thursday that its two larger competitors had barred the carrier from providing a competing air shuttle service on the highly profitable Sao Paulo to Rio de Janeiro route.
“Essentially what they did was they had a shutdown plan to keep us out,” CEO John Rodgerson told Reuters in an interview, referring to competitors Gol Linhas Aereas Inteligentes and LATAM Airlines Group.
The comments come weeks after Azul engineered a plan to break into the Sao Paulo-Rio de Janeiro route, by far the most transited in South America, but it fell apart after Gol and LATAM intervened.
The three airlines have been disputing the airport rights set to be left behind by their struggling competitor Avianca Brasil, which was scheduled to auction the routes this week as part of a bankruptcy process.
Azul, Brazil’s No. 3 airline, initially reached a deal with Avianca Brasil, but a few weeks later Gol and LATAM reached a different deal with Avianca Brasil’s key creditors, which was ultimately approved and sidelined Azul.
Both plans hinged on a successful Avianca Brasil bankruptcy auction, but the event was recently suspended indefinitely, meaning that even Gol and LATAM may not be able to get the airport rights they had agreed to buy.
“I don’t think they ever had the intention of closing on the deal,” Rodgerson said of Gol and LATAM’s agreement with Avianca Brasil.
Gol and LATAM have previously denied any anti-competitive stance.
Brazil’s antitrust regulator CADE said in April that it was concerned about a potential takeover by Brazil’s two major airlines, and that it preferred to see Azul or a new airline take over Avianca Brasil’s airport rights.
The rift also led Azul to leave Brazil’s airline industry group, known as ABEAR, late last month.
“I think the way they acted was inappropriate and not in the best interest of the industry,” Rodgerson said. “I don’t think we share the same values.”
Rodgerson gave the interview as part of Azul’s first quarter results announcement, in which higher operational costs weighed significantly, sending profits down 20% to 137.7 million reais ($35.06 million), despite significantly higher revenue compared to the same period last year.
While revenue grew 16% to 2.5 billion reais, personnel costs surged 37% amid continued expansion at the company, as well as the expiration of a payroll tax incentive.
“It’s kind of the new norm,” Rodgerson said.
Fuel costs also increased significantly, while other undisclosed costs jumped 34% to 224 million reais in the period.
Azul and its Brazilian competitors have faced higher costs in recent quarters due to the continued depreciation of the local currency, the real. While passengers buy their tickets in reais, many of the airline’s expenses, such as fuel, are denominated in the stronger U.S. dollar.
($1 = 3.9393 reais)
(Reporting by Marcelo Rochabrun; editing by Bernadette Baum and Bill Trott)
April 29 (Reuters) – Boeing Co said on Monday it did not “intentionally or otherwise” deactivate a safety alert for its angle-of-attack sensors on its 737 MAX aircraft, responding to reports the planemaker failed to tell Southwest Airlines Co and the U.S aviation regulator that the safety feature was deactivated before recent crashes.
“The disagree alert was tied or linked into the angle of attack indicator, which is an optional feature on the MAX. Unless an airline opted for the angle of attack indicator, the disagree alert was not operable,” Boeing said in a statement.
It said the disagree alert is not necessary for the safe operation of the airplane.
The company said following software modifications all new MAX aircraft will have an activated and operable disagree alert and an optional angle of attack indicator, while current MAX airplanes will have the ability to activate the disagree alert.
Boeing Chief Executive Officer Dennis Muilenburg was grilled at a press conference earlier on Monday, following two fatal crashes of the 737 MAX plane.
(Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)
SINGAPORE/ADDIS ABABA (Reuters) – Boeing Co said it invited more than 200 airline pilots, technical leaders and regulators for an information session on Wednesday as it looks to return the 737 MAX to commercial service.
The meeting is a sign that Boeing’s planned software patch is nearing completion, though it will still need regulatory approval.
Over the weekend, Ethiopian Airlines executives had questioned whether Boeing had told pilots enough about “aggressive” software that pushes the plane’s nose down, a focus of investigation into a deadly crash in Ethiopia this month that led to the global grounding of 737 MAX jets.
The informational session in Renton, Washington on Wednesday is part of a plan to reach all current and many future 737 MAX operators and their home regulators to discuss software and training updates to the jet, Boeing said in a statement.
Garuda Indonesia, which on Friday said it planned to cancel its order for 49 737 MAX jets citing a loss of passenger trust after the crashes, was invited to the briefing, CEO Ari Askhara told Reuters on Monday.
“We were informed on Friday, but because it is short notice we can’t send a pilot there,” he said, adding the airline had requested a webinar with Boeing but that idea had been rejected.
A Boeing spokeswoman said the Wednesday event was one of a series of in-person information sessions.
“We have been scheduling and will continue to arrange additional meetings to communicate with all current and many future MAX customers and operators,” she said.
Garuda has only one 737 MAX and had been reconsidering its order before the Ethiopian crash, as has fellow Indonesian carrier Lion Air, which experienced a deadly crash in October.
Singapore Airlines Ltd said on Monday its offshoot SilkAir, which operates the 737 MAX, had received the invitation to the Wednesday event and would send representatives.
Korean Air Lines Co Ltd, which before the grounding had been due to receive its first 737 MAX in April, said it planned to send pilots to Renton.
The 737 MAX is Boeing’s best-selling plane, with orders worth more than $500 billion at list prices.
Teams from the three U.S. airlines that own 737 MAX jets participated in a session in Renton reviewing a planned software upgrade on Saturday.
A U.S. official briefed on the matter Saturday said the Federal Aviation Administration (FAA) has not yet signed off on the software upgrade and training but the goal is to review them in coming weeks and approve them by April.
It remained unclear whether the software upgrade, called “design changes” by the FAA, will resolve concerns stemming from the ongoing investigation into the March 10 Ethiopian Airlines crash, which killed all 157 on board.
“After the crash it came to our attention that the system is aggressive,” Yohannes Hailemariam, vice president for flight operations at Ethiopian, told local reporters speaking in the Amharic language.
“It gives a message of stalling and it takes immediate action which is faster than the action which pilots were briefed to take by Boeing,” said Yohannes, himself a pilot with over 30 years of experience, including flying Boeing’s 777 and 787.
The U.S. official said planned changes included 15 minutes of training to help pilots deactivate the anti-stall system known as MCAS in the event of faulty sensor data or other issues. It also included some self-guided instruction, the official added.
American Airlines said Sunday it will extend flight cancellations through April 24 because of the grounding of the 737 MAX and cut some additional flights.
(Reporting by Jamie Freed in Singapore and Jason Neely in Addis Ababa; additional reporting by Cindy Silviana in Jakarta, Heekyong Yang in Seoul, Tracy Rucinski in Chicago and David Shepardson in Washington; Editing by Chris Reese and Michael Perry)
