Tag: crashes (Page 3 of 3)

Jet Grounding and Delays Overshadow Dubai Airshow

November 15, 2019 / WIL BALDWIN

FILE PHOTO: Emirates Airline Boeing 777 planes at are seen Dubai International Airport in Dubai

DUBAI (Reuters) – An eight-month crisis over the grounding of Boeing’s 737 MAX jets and widespread industrial delays are setting an unpredictable backdrop to next week’s Dubai Airshow, with some airlines reviewing fleet plans even as others look for bargains.

The biennial civil and military expo is a major showcase for wares from jumbo jets to military drones but faces growing questions over demand and the capability of overstretched suppliers, delegates arriving for the Nov. 17-21 event said.

Top of their agenda will be the worldwide grounding of the 737 MAX in the wake of two deadly crashes.

Investors who have pushed up Boeing <BA> shares believe the planemaker is turning a corner after the eight month grounding, with the company predicting commercial flights in January. But it also faces a logjam of undelivered jets that could take 1-2 years to unwind.

State-owned flydubai expects its fleet will now shrink by a third this year, highlighting the cost of the grounding for the biggest MAX customer outside the United States. “Flydubai has very big ambitions … given the scale of those ambitions, there’s little they can do but wait and watch, like everyone else,” said Teal Group analyst Richard Aboulafia.

Boeing lost one potential MAX customer earlier this year as Saudi budget airline flyadeal ditched a provisional order.

Experts say airline frustrations with plane and engine makers could also disrupt plans by the world’s largest jetmakers pushing for order endorsements. The Middle East’s largest aerospace event will give Airbus <EADSY> and Boeing a chance to sit with some of their top customers who have threatened to walk from billions in deals.

The planemakers are struggling to deliver aircraft on time, forcing airlines to delay expansion plans, while engines on some jets are consistently causing issues for carriers.

“This seems to be a systemic issue across the board,” said Novus Aviation Capital Managing Director Mounir Kuzbari.

“As a result, we see stress on the relationship between airlines and the plane and engine makers.” Dubai’s Emirates, by far the region’s biggest airline, has issued a stern warning to plane and engine makers. It will no longer take delivery of aircraft that do not meet performance expectations, raising doubts over $35 billion in pending orders.

Airbus, Boeing and engine makers will be looking to allay concerns as they finalise jet sales with Emirates, which is also looking at reducing an order for the delayed Boeing 777X.

Airbus is seen close to a final order for A330neo and A350 jets while Boeing aims to salvage a provisional order for 787s.

GULF PRESSURE

Air Arabia could, however, steal the show with a planned order of up to 120 Airbus jets, industry sources say.

Kuwait’s Jazeera Airways is in negotiations with Airbus and Boeing for around two dozen airplanes.

Past editions of Dubai’s premier trade event have featured blockbuster deals, often led by Emirates as Gulf carriers redrew the aviation map around their ‘super-connector’ hubs.

But the Gulf hub model is increasingly under pressure as the once-rapid growth of the region’s biggest airlines slows.

“The market continues to be weak for all airlines in the region; we should see a further 2-3% reduction in passenger numbers for the full year,” said Diogenis Papiomytis, Frost & Sullivan’s Global Program Director for Commercial Aviation.

Middle East military leaders touring the displays will try to gauge whether they are on the cusp of another regional splurge on weapons after an escalation in Gulf tensions.

A series of attacks over the summer has highlighted potential security gaps among some of the world’s top defence spenders who now increasingly buy from China and Russia.

(Reporting by Alexander Cornwell, Tim Hepher, Ankit Ajmera, Stanley Carvalho; Editing by Mark Potter)

United Lifts 2019 Profit Target on Strong Travel Demand

October 15, 2019 / WIL BALDWIN

Oct 15 (Reuters) – United Airlines on Tuesday topped Wall Street estimates for quarterly profit, boosted by higher fares and lower fuel costs, and lifted its 2019 profit target despite the continued grounding of the Boeing 737 MAX.

Chicago-based United is one of three U.S. airlines that have each had to cancel more than 2,000 monthly flights through the end of the year as Boeing Co’s 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia.

The flight cancellations have weighed on airline profits and costs, but strong travel demand, despite concerns of a global economic slowdown, continued to offset MAX headwinds and disruption in Hong Kong and China.

As a result, United raised its 2019 adjusted diluted earnings per share guidance to $11.25-$12.25 versus $10.50-$12.00 previously.

United shares, which closed up 1% at $87.88 before the earnings release, were about 1% higher in after-hours trading.

Total operating revenue rose 3.4% to $11.38 billion, underpinned by the airline’s three-year strategy to build up flight connections through its main U.S. hubs.

But closely watched unit costs excluding fuel and profit-sharing expenses, a concern for investors, rose 2.1%.

The airline, which is in talks with Boeing over 737 MAX compensation, did not provide any details on the estimated financial impact of the grounding.

Adjusted net income rose to $1.05 billion, or $4.07 per share, in the third quarter, from $834 million or $3.05 per share a year earlier.

Analysts on average had forecast $3.95 per share, according to IBES data from Refinitiv.

United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EDT (1430 GMT).

Fellow U.S. MAX operators Southwest Airlines and American Airlines, which have both warned of a pretax profit hit from the MAX grounding, are due to report quarterly results next week.

United, Southwest and American are all scheduling without the MAX until early January.

(Reporting by Tracy Rucinski in Chicago and Sanjana Shivdas in Bengaluru Editing by Shinjini Ganguli and Matthew Lewis)

‘System is not Broken’ After 737 MAX Crashes

September 28, 2019 / WIL BALDWIN

FILE PHOTO: A Boeing 737 MAX aircraft is seen grounded at a storage area in an aerial photo at Boeing Field in Seattle

NEW YORK (Reuters) – The U.S. Federal Aviation Administration process for certifying new airplanes is not broken but needs to be improved, the chair of an international panel of air-safety regulators, tasked to review Boeing Co’s <BA> 737 Max, said on Friday.

Speaking on the sidelines of an event at a New York City college, Christopher Hart, chair of the multi-agency panel, said there was no need to question the agency’s overall way of certifying airplanes.

“The U.S. aviation system each day transports millions of people safely, so it’s not like we have to completely overhaul the entire system, it’s not broken. But these incidents have shown us that there are ways to improve the existing system,” Hart said, referring to fatal crashes of a Lion Air 737 MAX in Indonesia and an Ethiopian Airlines 737 MAX five months apart that killed a total of 346 people.

The MAX remains grounded and Boeing has not set when it will conduct a key certification test flight. Some in Congress and in aviation have criticized the FAA’s longstanding practice of delegating certification tasks to manufacturers.

Michael Perrone, who heads the Professional Aviation Safety Specialists union, said at a House hearing in July that external entities designated by the FAA “are now performing more than 90 percent of FAA’s certification activities despite serious concerns that oversight is lacking.”

Hart, former chairman of the National Transportation Safety Board (NTSB) and a licensed pilot, heads the Joint Authorities Technical Review, a panel including air-safety regulators from the United States, Canada, China, Indonesia, European Union and Brazil.

Reuters reported on Sept. 17 the review’s recommendations will include citing regulations that need to be harmonized internationally and where communications can be improved at the FAA and among international regulators, citing a person briefed on the matter.

Hart on Friday said the panel would release its recommendations to the FAA “shortly,” but declined to provide more details on the timeline. He said the panel’s goal was not for all of its members to agree, but to provide a wide range of opinions and recommendations to the FAA.

Hart spoke to students the Vaughn College of Aeronautics and Technology in Queens. Asked by a student whether passengers can be expected to fly again on a 737 MAX, Hart said he predicted people would “sooner or later forget” about the crashes and investigations.

“This will be the safest airplane out there by the time it has to go through all the hoops and hurdles,” he said.

He also was optimistic when asked whether the deadly crashes would spell the end for Boeing’s 737 MAX programme.

“It will be a cold day in hell before Southwest starts moving away from 737s because that’s all they got,” Hart said, referring to Southwest Airlines Co <LUV.N>, which has cancelled flights into January because of the MAX grounding.

A Southwest Airlines spokesman declined to comment directly on Hart’s comments but said the airline has “no plans to veer away from our all-737 fleet.”

(Reporting by Tina Bellon in New York; Additional reporting by David Shepardson; Editing by Daniel Wallis)

FAA Requiring Inspections for Cracks on Some 737 NG Planes

September 28, 2019 / WIL BALDWIN

WASHINGTON (Reuters) – The U.S. Federal Aviation Administration late on Friday said it would require operators of some Boeing 737 NG jetliners to conduct inspections for structural cracks and make repairs as needed following the discovery of cracks on a small number of planes.

The FAA said Boeing notified it of the issue “after it discovered the cracks while conducting modifications on a heavily used aircraft.” Subsequent inspections “uncovered similar cracks in a small number of additional planes.” Boeing said on Friday it has been in contact with 737 NG operators about a cracking issue, but added that “no in-service issues have been reported.”

Neither the FAA nor Boeing immediately said how many planes were impacted by the required inspections.

The 737 NG, or Next Generation, was introduced in 1997 and is the third generation version of the best-selling Boeing airplane. The 737 MAX, which was grounded in March after two fatal crashes in five months, is not affected by this issue, Boeing said.

The FAA said it would ask operators of the NG to “report their findings to the agency immediately” after completing inspections. Boeing said “over the coming days, we will work closely with our customers to implement a recommended inspection plan for certain airplanes in the fleet.”

KOMO News reported on Friday the issue involved cracked “pickle forks” in some 737 NG jets. The pickle fork attaches the plane’s fuselage, or body, to the wing structure and manages forces. A failure of the part in flight could pose a serious risk. KOMO said workers found a severely cracked pickle fork on a Boeing 737NG earlier this month.

(Reporting by David Shepardson; Editing by Leslie Adler and Sandra Maler)

Taiwan’s China Airlines Signs MOU for 11 Airbus A321neo Jet’s

June 19, 2019 / WIL BALDWIN

Le Bourget, France, June 19 (Reuters) – Airbus unveiled an aircraft deal with Taiwan’s China Airlines on Wednesday, snatching the carrier’s medium-haul fleet renewal from Boeing a day after its U.S. rival made a shock entry into the single-aisle fleet of British Airways owner IAG.

The European planemaker said China Airlines had signed a preliminary deal to buy 11 A321neo aircraft, worth about $1.4 billion at list prices, while leasing another 14.

Although much smaller than the IAG letter of intent for 200 Boeing 737 MAX announced on Tuesday, the China Airlines deal signals intensified competition in Asia where Boeing this week predicted 40 percent of jets would be delivered over the next 20 years.

Airlines can rarely be persuaded to jump ship to rival suppliers because of the costs of training and parts, but this week’s Paris Airshow has witnessed two such announcements as sold-out planemakers mount incursions to continue their growth.

In a further competitive twist, Boeing announced on Monday it would take over the supply of spare parts for the remaining Airbus A320 fleet at British Airways.

China Airlines announced the leasing part of the deal in May and Reuters reported it would pave the way for the Taiwan carrier to switch its medium-haul fleet to the Airbus A320neo.

The rare deal to replace older 737s took years to complete and was drafted before the 737 MAX was engulfed by a crisis involving two crashes and a worldwide grounding, sources said.

(Reporting by Tim Hepher, Editing by Mark Potter)

Norwegian Air Expects 737 MAX Grounded Through August

June 14, 2019 / WIL BALDWIN

FILE PHOTO: Bjoern Kjos, CEO of Norwegian Air Shuttle ASA, attends a press conference presenting quarterly report of the company, in Oslo

PARIS (Reuters) – Norwegian Air expects Boeing’s 737 MAX aircraft to remain grounded until at least the end of August, missing the European summer season, CEO Bjoern Kjos said on Friday.

“If you ask Boeing they still say June or July,” Kjos said at the Paris Air Forum. “But we’re already in mid-June – we’ve planned for the MAX to be out until the end of August.”

More than 300 Boeing 737 MAX jets have been grounded worldwide after two fatal crashes in Ethiopia and Indonesia killed nearly 350 people. Some airlines now expect the plane to remain out of action until the end of 2019.

Norwegian, which operated 18 of the planes, has said the grounding will raise its costs by up to 500 million Norwegian crowns ($58 million). The low-cost, long-haul operator has delayed disposal of older Boeing 737 models or prolonged leasing contracts while it waits for their MAX replacements.

Boeing is awaiting a decisions by the U.S. Federal Aviation Administration on software improvements it proposed after the crashes and whether to require additional pilot training before flights can resume.

If more training is ordered, a shortage of simulators means that “it might be much longer” before commercial flights resume, Kjos said. “For some operators it could take up to a year.”

As a customer of Boeing’s GoldCare maintenance program, however, the CEO said Norwegian might not have to wait that long.

“We’d hope to be at the front of the queue,” he said.

(Reporting by Laurence Frost and Tim Hepher; Editing by David Goodman)

United CEO Promises To Rebook 737 MAX Passengers

May 22, 2019 / WIL BALDWIN

FILE PHOTO: United Airlines Chief Executive Officer Oscar Munoz poses for pictures in his office at the company’s headquarters in Chicago, Illinois, U.S., November 14, 2018.
Picture taken November 14, 2018. REUTERS/Tracy Rucinski

CHICAGO (Reuters) – United Airlines Chief Executive Oscar Munoz promised on Wednesday to accommodate any passengers concerned about flying Boeing Co’s 737 MAX jets once regulators deem the aircraft safe to fly again.

United is the only one of the three U.S. MAX operators to make such an announcement so far. Southwest Airlines Co, the world’s largest MAX operator, said on Wednesday discussions were still ongoing.

American Airlines Group Inc said on Wednesday “customers can be assured that our pilots would never operate an unsafe aircraft,” echoing other carriers’ insistence that safety is paramount to putting the globally grounded jets back in the air.

Still, following two fatal crashes of the MAX model within months, an Ethiopian Airlines jet in March after a Lion Air jet in October, Munoz said he wants customers to feel as comfortable as possible.

“If people need any kind of adjustments we will absolutely rebook them,” Munoz told reporters after the airline’s annual shareholders’ meeting.

Munoz said it was too soon to discuss whether Boeing would pick up the tab. None of the shareholders at the meeting questioned the company’s MAX plans. United is in the midst of a growth plan that has fuelled a 17% share rise over the past year.

Global regulators are meeting with the U.S. Federal Aviation Administration on Thursday to discuss Boeing’s proposed software fix and training updates for the MAX, which has been grounded since mid-March.

The timing of regulatory approval is still unclear, and Munoz said that is only the first step, with independent analysis and public and employee confidence critical in the Chicago-based airline’s strategy for eventually flying the jets again.

A Reuters/Ipsos poll released last week showed U.S. fliers still value ticket prices over aircraft models when choosing flights, suggesting the crashes have had little impact on consumer sentiment.

The No. 3 U.S. airline by passenger traffic, which trades under parent company United Continental Holdings Inc, operates 14 MAX jets and has dozens more on order.

United, American and Southwest together have cancelled thousands of flights during the busy U.S. summer travel season and warned of hits to profits from the grounded MAX, which many airlines had rushed to buy thanks to the narrowbody’s higher fuel-efficiency and longer range.

Still, Munoz said he was not concerned about the timetable for a return to service.

“We have to fly this aircraft for a long period of time, so a week, a month, whatever is not that important,” Munoz said.

(Reporting by Tracy Rucinski in Chicago; Editing by Matthew Lewis and Phil Berlowitz)

Trump Says Boeing Should ‘Rebrand’ Grounded 737 MAX Jet

April 15, 2019 / WIL BALDWIN

FILE PHOTO: U.S. President Donald Trump speaks at the debut of the Boeing South Carolina Boeing 787-10 Dreamliner in North Charleston, South Carolina, U.S., February 17, 2017. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) – U.S. President Donald Trump on Monday urged Boeing Co to fix and “rebrand” its 737 MAX jetliner following two fatal crashes, as regulators worldwide continue to work with the planemaker to review its grounded best-selling aircraft.

The Federal Aviation Administration has been meeting major airlines and convened a joint review with aviation regulators from other countries, while federal prosecutors, the U.S. Department of Transportation inspector general’s office and a blue-ribbon panel are reviewing the plane’s certification.

In an early-morning post on Twitter, Trump, who owned the Trump Shuttle airline from 1989 to 1992 and is an aviation enthusiast, weighed in with his own advice.

“What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name. No product has suffered like this one. But again, what the hell do I know?” Trump tweeted.

The plane’s grounding has also threatened the U.S. summer travel season, with some airlines removing the 737 from their schedules through August.

Trump issued the tweet as Boeing tries to restore trust in its fastest-selling jet, the main source of profits and cash at the Chicago-based planemaker which has won some 5,000 orders or around seven years of production for the aircraft.

Chief Executive Dennis Muilenburg has apologised on behalf of Boeing for lives lost in two recent accidents and promised that it would address the risk that flight software meant to prevent the plane stalling could be activated by wrong data.

Boeing has also held dozens of briefings and simulator sessions for airline executives and pilots and held worldwide meetings with airline branding and communications staff.

Pilots are expected to play a major role in regaining public confidence in the aircraft, but Trump’s tweet marks the first time the brand underpinning Boeing profits in coming years has been thrown into question at a high level.

Brand Finance, a UK-based consultancy that tracks the value of global brands, rejected the idea that Boeing should abandon the MAX brand but said its corporate reputation was in the firing line.

“This has without a doubt damaged Boeing’s reputation and we foresee a dent to the (Boeing) brand’s value at over $12 billion (£9 billion),” Chief Executive David Haigh said by email when asked about Trump’s comments.

“This is a temporary blip in the long run for Boeing,” he said, adding Toyota and others had recovered from similar high-profile crises without a drastic rebranding exercise.

Brand Finance had previously estimated the damage to the value of Boeing’s reputation at $7.5 billion immediately after the March 10 crash of an Ethiopian Airlines jetliner, the second fatal accident involving the 737 MAX in five months.

Boeing has the world’s most valuable aerospace brand, having seen the value of its overall corporate image rise by 61 percent to $32 billion in 2018, according to the same branding firm.

(Reporting by Susan Heavey, Tim Hepher; Editing by Jeffrey Benkoe and Toby Chopra)

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