PARIS, June 18 (Reuters) – Boeing’s grounded 737 MAX jet received a boost on Tuesday after British Airways-owner IAG signed a letter of intent to order 200 of the planes and said it was confident that it would return to service in the coming months.
Boeing said the deal had a value of more than $24 billion at list prices.
IAG said the mix of 737-8 and 737-10 aircraft, to be delivered between 2023 and 2027, would be powered by CFM Leap engines and used across a number of its airlines including British Airways, Vueling and Level.
The MAX 737 was grounded in March following two deadly crashes, and Boeing has been working on a software fix to get the jet back flying by the end of the year.
IAG Chief Executive Willie Walsh said he had experienced Boeing’s MCAS anti-stall software in person, adding it was “very helpful to see it in operation” and to “understand the changes” that Boeing was proposing.
“It gave me confidence both in terms of the aircraft and the changes that Boeing introduced,” he said at the announcement of the deal at the Paris Airshow.
“I am confident in Boeing.”
Boeing shares rose 2% on the announcement. The company is working towards a certification flight with regulators soon.
Boeing commercial airplanes boss Kevin McAllister said the decision of when the MAX flies again was in the hands of the regulators.
(Reporting by Tim Hepher, Eric M. Johnson and Alistair Smout Editing by Jane Merriman and Mark Potter)
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)
(Corrects “cancels” to “plans to postpone” in the first paragraph after AZAL changed its comment. Removes quote)
MOSCOW,
June 3 (Reuters) – Azerbaijan airline AZAL plans to postpone a $1
billion contract with Boeing to purchase 10 737 MAX jets, a spokesman
said on Monday, following fatal crashes involving the aircraft in
Ethiopia and Indonesia.
Boeing’s
top-selling aircraft, the 737 MAX, has been grounded worldwide since
the March 10 disaster, which killed 157 people and came just five months
after a Lion Air crash in Indonesia that killed 189 in a plane of the
same model.
Many countries barred 737 Max jets from taking off or landing at local airports.
(Reporting by Nailia Bagirova; writing by Margarita Antidze)
WASHINGTON (Reuters) – The Federal Aviation Administration said on Tuesday it had convened a multi-agency Technical Advisory Board to review Boeing’s proposed software fix on the grounded 737 MAX.
The board consists of experts from the FAA, U.S. Air Force, NASA and Volpe National Transportation Systems Center that were not involved in any aspect of the Boeing 737 MAX certification. The board’s recommendations will “directly inform the FAA’s decision concerning the 737 MAX fleet’s safe return to service.”
The plane was grounded worldwide in mid-March after two Boeing 737 MAX crashes in October and March killed 346 people.
Boeing, which has yet to formally submit the software fix to the FAA for approval, did not immediately comment Tuesday on the new review.
Some in Congress have urged the FAA to conduct an independent review into the anti-stall system at the center of investigations into two deadly plane crashes before allowing the planes to resume flying.
The board known as TAB will assess Boeing’s proposed fix to the Maneuvering Characteristics Augmentation System (MCAS), the FAA said.
“The TAB is charged with evaluating Boeing and FAA efforts related to Boeing’s software update and its integration into the 737 MAX flight control system. The TAB will identify issues where further investigation is required prior to FAA approval of the design change,” the FAA said.
The world’s largest planemaker, facing its worst crisis in years and the worldwide grounding of its top-selling jetliner, has said its software upgrade and associated pilot training will add layers of protection to prevent erroneous data from triggering MCAS.
The system activated in the Ethiopian Airlines crash in March and also during a separate Lion Air crash in Indonesia in October.
There are a number of other reviews ongoing, including a blue-ribbon committee appointed by Transportation Secretary Elaine Chao looking at the FAA’s aircraft certification process.
Federal prosecutors, the Transportation Department’s inspector general and lawmakers are investigating the FAA’s certification of the 737 MAX 8 aircraft.
A separate joint review by 10 governmental air regulators started last week and is expected to last about 90 days, but the FAA has said that a decision on ungrounding the plane is not contingent on that review being completed.
(Reporting by David Shepardson; Editing by Nick Zieminski)
This image taken from a video distributed by Russian Investigative Committee on Sunday, May 5, 2019, shows the Sukhoi SSJ100 aircraft of Aeroflot Airlines on fire, at Sheremetyevo airport, outside Moscow, Russia. At least 40 people died when an Aeroflot airliner burst into flames while making an emergency landing at Moscow’s Sheremetyevo airport, officials said early Monday. (The Investigative Committee of the Russian Federation via AP)
FRANKFURT, Germany (AP) — The Aeroflot-operated SSJ100 passenger jet that caught fire during an emergency landing in Moscow is part of Russia’s efforts to maintain a presence in civil aviation in a market dominated by companies like Boeing, Airbus and Embraer.
Here’s a quick look at the SSJ100 and the Russian company that built it, the Sukhoi Civil Aircraft Company:
THE PLANE
The
SSJ100, or Superjet 100, is a short- to medium-haul narrow body jet
with two engines that can be configured to carry up to 103 people.
At
that size, it’s intended to substitute for larger planes such as the
Boeing 737 or Airbus 321 on shorter, less travelled routes and during
slower travel seasons. Regional aircraft are an important part of
Russia’s transportation system, given the country’s enormous distances
and many remote towns. The Superjet succeeds older, Soviet-built planes
such as the Tu-134 airliner.
The plane is built at the Sukhoi Civil Aircraft Company’s plant in Komsomolsk-on-Amur in Russia’s distant Far East region. Although the design is Russian, the company says it uses the latest Western technology as well. The engines are made by PowerJet, a joint venture between France’s Safran Aircraft Engines and Russia’s Saturn.
The Sukhoi Superjet 100 aircraft of Airflot Airlines, center, is seen after an emergency landing in Sheremetyevo airport in Moscow, Russia, Sunday, May 5, 2019. (Moscow News Agency photo via AP)
The
plane first flew in 2008 and entered commercial service in 2011. It is
certified by the European Union Safety Agency but is mainly used in
Russia and has not made much headway against international competitors,
not just from Boeing and Airbus but also from Brazil’s Embraer.
Aeroflot
is the biggest client with 50 of the planes. Mexico’s Interjet said
Sunday it operated five of the planes “under the highest safety
standards.”
Interjet
earlier operated 22 Superjets but referred in a recent earnings report
to the “gradual phase out of the fleet of SSJ100.” The company reported
lost sales after the planes were grounded due to a defect in the tail
section in December 2016 and said it was seeking “contractual recovery
of amounts related to maintenance costs” for the planes.
Ireland’s CityJet, which supplies planes and crews to other airlines, stopped operating several Superjets in January.
People gather around the damaged Sukhoi SSJ100 aircraft of Aeroflot Airlines at Sheremetyevo airport, outside Moscow, Russia, Monday, May 6, 2019. Russia’s main investigative body says both flight recorders have been recovered from the plane that caught fire while making an emergency landing at Moscow’s Sheremetyevo Airport, killing at least 40 people on Sunday. (AP Photo/Pavel Golovkin)
THE COMPANY
The
Sukhoi Civil Aircraft Company bears the name of the legendary Soviet
aircraft designer, Pavel Sukhoi, who was responsible for a series of
Soviet military aircraft starting before World War II.
Today’s
firm is part of Russia’s United Aircraft Company, which consolidated
many of the legendary names of Soviet aviation such as MiG, Sukhoi,
Tupolev and Yak. UAC was established by a decree from President Vladimir
Putin in 2006 to promote the Russian aircraft industry, which is seen
as essential for the security and defense of the country. Much of its
production goes to the military, while the SSJ100 is the key project
aimed at maintaining a Russian presence in civil aviation.
TROUBLES
On
May 9, 2012, a demonstration flight hit Mount Salak in Indonesia,
killing all 45 on board, after the pilot disregarded six alarms from the
terrain warning system on the apparent assumption there was a problem
with the terrain database, according to the report from Indonesia’s air
safety regulator. The plane had unintentionally left a circling pattern
after the crew was distracted by a prolonged conversation not related to
flying the plane.
And a Superjet skidded off the runway at Iceland’s Keflavik airport in 2013 with landing gear up during flight certification tests involving landing on one engine; one crew member suffered minor injuries.
In this photo taken on Tuesday, April 30, 2019, the Sukhoi SSJ-100 aircraft of Aeroflot Airlines that made an emergency landing on Sunday, May 5, 2019 in Moscow’s Sheremetyevo airport, takes off from the Siberian city of Tyumen, Russia. Russia’s flagship airline Aeroflot says the plane that caught fire at Moscow’s Sheremetyevo Airport, killing at least one person, had been forced to turn back after taking off for the city of Murmansk because of technical reasons. (AP Photo/Marina Lystseva)
FILE PHOTO: A United Express Embraer ERJ-175LR airplane is pictured at Vancouver’s international airport in Richmond, British Columbia, Canada, February 5, 2019. REUTERS/Ben Nelms
(Reuters) – United Airlines on Tuesday reported a better-than-expected jump in first-quarter profit as it sold more tickets and cut costs, standing by its 2019 profit target even as its Boeing Co 737 MAX jets remain grounded.
Chicago-based United has removed its 14 MAX aircraft, which were suspended worldwide in March following two fatal crashes, from its flying schedule through early July, eating into U.S. airlines’ peak summer travel season.
Still, the airline’s parent United Continental Holdings Inc reiterated its estimate for adjusted earnings of $10 to $12 per share in 2019, and said its strategy for scheduling more flights out of its hubs was continuing to win customers.
Adjusted earnings per share rose to $1.15 in the first quarter, ending March 31, from 49 cents a year earlier, overcoming a U.S. government shutdown and severe winter weather earlier this year that curtailed flights.
Wall Street analysts on average had forecast 95 cents per share, according to IBES data from Refinitiv.
Its shares rose 2.8 percent in after-hours trading.
United has largely avoided cancelling MAX flights by servicing those routes with larger aircraft, but President Scott Kirby warned last week that the strategy could not last indefinitely.
The airline, which has been adding seats at a faster pace than rivals, trimmed its 2019 capacity growth target to between 4 percent and 5 percent from 4 percent to 6 percent previously, but did not say whether the decision reflected the effect of the grounded MAX.
Total operating revenue rose 7.1 percent to $8.73 billion in the quarter, while closely watched revenue per available seat mile rose 1.1 percent.
In the second quarter, United said it expects unit revenue to rise between 0.5 percent and 2.5 percent while unit costs, which fell 1.8 percent in the first quarter, were expected to be flat to 1 percent higher.
The No. 3 U.S. carrier is the first of three U.S. 737 MAX operators to report first-quarter results. Southwest Airlines Co and American Airlines Group Inc, which have removed their MAX jets from schedules into August, report on April 25 and April 26 respectively.
A Federal Aviation Administration review board said on Tuesday that it found a Boeing software update for the MAX to be “operationally suitable,” suggesting the lengthy regulatory process to get the planes back in the air was underway.
Rival Delta Air Lines Inc, which does not operate the 737 MAX, lifted its 2019 revenue forecast last week after reporting better-than-expected quarterly profit.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Sanjana Shivdas in Bengaluru; Editing by Bill Rigby)
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)
(Reuters) – Air Canada said on Tuesday it would delay the launch of certain seasonal flights this spring, as the carrier wrestles with the challenge of servicing routes previously flown by its grounded Boeing 737 MAX aircraft.
Canada’s largest carrier said it would put off the launch of at least five seasonal routes, including delaying its Vancouver to Boston service to June 16 from June 1.
Montreal-based Air Canada said a previously-announced halting of flights from two Eastern Canadian cities to London’s Heathrow airport would now remain suspended until May 31.
Air Canada, which previously suspended its 2019 financial forecasts, has removed 24 MAX jets from its flight schedule until July 1, following grounding of the Boeing jets after two recent crashes involving the model.
The global grounding, following the crash of an Ethiopian Airlines flight in March, has left U.S. and Canadian airlines with the logistical challenge of replacing the popular roughly 175-seat MAX on certain routes, at a time of rising passenger demand.
The Canadian carrier has been flying alternative planes or consolidating flights into larger jets that were previous flown more frequently on smaller aircraft.
Air Canada has also said it is speeding up the integration of four Airbus A321 aircraft it acquired in late December from Iceland’s cash-strapped WOW air.
Air Canada is “accommodating as best as they can,” said AltaCorp analyst Chris Murray. “At the same time, there is still some uncertainty about when the MAX grounding notice is going to be lifted.”
On Monday, Boeing said it planned to submit a proposed software enhancement package for the grounded 737 MAX in “the coming weeks” after the company had previously said it planned to deliver the fix for government approval by last week.
Anglo-German tour operator TUI said last week that its profit would fall by at least 200 million euros ($223.96 million) this year due to the cost of substituting for the MAX planes, along with loss of business and lower fuel efficiency from the replacement aircraft.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shinjini Ganguli and Bill Berkrot)
NEW DELHI/BENGALURU (Reuters) – India’s SpiceJet Ltd could benefit from cash-strapped Jet Airways being forced to ground planes, and the low-cost carrier is in talks with lessors to lease some of those aircraft, a person with direct knowledge of the matter told Reuters.
Shares of SpiceJet rose as much as 7.2 percent on Wednesday in their biggest percentage gain since Dec. 18 as investors bet the airline could take advantage of Jet Airways’ woes.
SpiceJet last week was forced to ground its 12 Boeing Co 737 MAX 8 planes by India’s aviation watchdog, following safety concerns after the Ethiopian Airlines plane crash that killed 157 people.
SpiceJet and Jet Airways are the only carriers in India that operate this type of aircraft and have a total of about 400 on order. The airlines also operate the previous model, the 737-800 among other Boeing planes.
The 737-800 makes up the majority of the Jet Airways fleet, and the airline is now operating only 41 aircraft, the Directorate General of Civil Aviation (DGCA) said on Tuesday.
That means around two-thirds of its fleet is grounded for non-payment to lessors, maintenance or other reasons.
“Lessors are panicking as they haven’t been paid and if Jet goes for insolvency, their planes will be stuck in India, so many of them are chasing SpiceJet,” said the person quoted earlier.
The person said SpiceJet needs at least twelve 737s to cover the grounded MAX planes and it is negotiating for more. Jet Airways pilots are also queuing up to join the budget airline.
Jet Airways’ lessors have offered 50 aircraft to SpiceJet, according to a report by news wire IANS.
SpiceJet and Jet Airways did not immediately respond to a request for comment.
Jet Airways shares dropped about 7 percent on Wednesday as its financial crisis deepened, with the Indian government calling for an emergency meeting and pilots threatening to go on strike over unpaid salaries.
The government has asked state-run banks to rescue Jet Airways without pushing it into bankruptcy, two people within the administration have told Reuters, as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election.
The 25-year-old airline has defaulted on loans after racking up over $1 billion in debt, and owes money to banks, suppliers, pilots and lessors – some of whom have started terminating their lease deals with the carrier.
This has forced Jet Airways to cancel hundreds of flights, leaving passengers stranded and angry. The number of Jet Airways flights has fallen by 80 percent from a year ago, according to the DGCA.
(By Aditi Shah and Tanvi Mehta, Additional reporting by Arnab Paul in Bengaluru, Editing by Sherry Jacob-Phillips and Shreejay Sinha)
FILE PHOTO: A Jet Airways passenger aircraft takes off from the airport in Ahmedabad, August 12, 2013. REUTERS/Amit Dave/File Photo
WASHINGTON
(Reuters) – The United States on Wednesday grounded Boeing Co’s 737 MAX
jets, citing new satellite data and evidence from the scene of Sunday’s
crash of an Ethiopian Airlines plane that killed 157 people, the second
disaster involving the 737 in less than five months.
It
was the second time the U.S. Federal Aviation Administration has halted
flights of a Boeing plane in six years. It had grounded the 787
Dreamliner in 2013 because of problems with smoking batteries.
Shares
of the world’s biggest plane maker, which were up earlier in the
session, fell 2 percent to $370.48. The shares have fallen about 13
percent since Sunday’s crash, losing about $32 billion of market value.
Shares of Southwest Airlines Co, which has the largest fleet of 737 MAX aircraft, fell 0.4 percent.
“The
agency made this decision as a result of the data gathering process and
new evidence collected at the site and analyzed today,” the FAA said in
a statement, shortly after U.S. President Donald Trump announced the
planes would be grounded.
“This evidence, together with newly refined satellite data available to FAA this morning, led to this decision.”
The grounding will remain in effect as the FAA investigates.
Boeing, which maintained that its planes were safe to fly, said it supported the move to temporarily ground 737 MAX flights.
The
United States joins Europe, China and other countries in grounding
Boeing’s newest plane since the Ethiopian Airlines flight crashed soon
after taking off from Addis Ababa.
The
still-unexplained crash followed another involving a Boeing 737 MAX in
Indonesia five months ago that killed 189 people. Although there is no
proof of any link, the twin disasters have spooked passengers.
The grounding was welcomed by air workers in the United States.
“He
(Trump) did the right thing by grounding this fleet, both for air
travelers and aviation workers,” John Samuelsen, international president
of the Transport Workers Union of America, which represent aviation
workers and flight attendants, told Reuters shortly after the
announcement.
“Our
members are excited, and are no longer concerned about stepping into a
workplace which could lead to the end of their lives, potentially.”
NEW SATELLITE DATA
Canada
also grounded 737 MAX jets on Wednesday, saying satellite data
suggested similarities to the previous crash involving the same plane
model in October.
U.S.-based
aircraft-tracking firm Aireon provided the satellite data to the FAA,
Transport Canada and several other authorities, company spokeswoman
Jessie Hillenbrand said.
Aireon’s
space-based system can monitor data from aircraft equipped with
Automatic Dependent Surveillance-Broadcast (ADS-B) transponders. The
data is considered less detailed than that in black boxes, which look at
systems running inside the plane.
Earlier
on Wednesday, Germany’s federal agency responsible for investigating
air accidents said it would not analyze the black box from the Ethiopian
Airlines plane, casting uncertainty over the process of finding out
what may have caused the disaster. The U.S. FAA said the black boxes
were headed to France later on Wednesday.
Ethiopian
Airlines spokesman Asrat Begashaw said it was still unclear what
happened on Sunday, but its pilot had reported control issues as opposed
to external factors such as birds.
“The pilot reported flight control problems and requested to turn back. In fact he was allowed to turn back,” he said.
(Reporting by David Shepardson in Washington, Kumerra Gemechu in Gora-Bokka, Ethiopia, David Ljunggren in Ottawa; Additional reporting by Duncan Miriri and Aaron Maasho in Addis Ababa; Doina Chiacu in Washington, Omar Mohammed and Maggie Fick in Nairobi; Tim Hepher in Paris; Jamie Freed in Singapore; Terje Solsvik in Oslo; Aditi Shah in Mumbai; Sanjana Shivdas in Bengaluru; Aleksandar Vasovic in Belgrade; Julie Gordon in Ottawa; Angela Moon in New York; Writing by Andrew Cawthorne, Frances Kerry and Bill; Rigby; Editing by Gareth Jones, Nick Zieminski and Grant McCool)
