MOSCOW (Reuters) – Russian airline Ural Airlines plans to receive the first of 14 previously ordered Boeing-737 MAX aircraft for leasing in December, Interfax news agency reported, citing its chief executive Sergei Skuratov.
Two Boeing MAX aircraft crashed in Ethiopia in March and Indonesia last October, triggering the global grounding of the aircraft. Regulators must approve the fix and new pilot training before the jets can fly again.
“These are good aircrafts. Mistakes have been made, but they are going to be fixed,” Skuratov was quoted as saying by Interfax.
Ural Airlines signed a deal for the leasing of 14 Boeing-737 MAX 8 in the spring of 2018. The delivery was expected between October 2019 and May 2022, Interfax said.
When asked whether the company considered cancelling the deal, Skuratov told the agency that “Boeing has certain advantages: seven hours 45 minutes (of flight) without refueling fully loaded.”
Ural Airlines plans to receive its first Airbus A320neo in August with an additional four jets expected to arrive by the end of 2019, he added.
(Reporting by Polina Devitt,; Editing by William Maclean)
CHICAGO, July 1 (Reuters) – Southwest Airlines expects it will have to remove the grounded Boeing Co 737 MAX jets from its flying schedule beyond the current Oct. 1 re-entry date following the discovery of a fresh safety issue, Chief Executive Gary Kelly told employees on Monday.
Last week, Boeing said that it would take until at least September to solve 737 MAX software issues – later than airlines had been expecting – after U.S. aviation regulators uncovered a new problem during simulator sessions.
“I’m sure this will cause us to have to take the MAX out of the schedule beyond Oct. 1,” Kelly said in an internal update, adding that the company would also see “what other modifications we might need to make our plans for this year because it’s obviously extending well beyond what I had hoped.”
Kelly did not elaborate on the possible modifications. So far, the Texas-based airline has tried to substitute its MAX routes with spare aircraft but has still been forced to cancel about 115 daily flights.
American Airlines Group and United Airlines Holdings , the other two U.S. carriers that operate the 737 MAX, have removed the jetliner from their flying schedules until early September.
The three airlines are expected to provide more details on the financial toll of a prolonged MAX grounding during second quarter results later in July.
Boeing’s fast-selling narrowbody was grounded worldwide in March following two deadly crashes within five months.
(Reporting by Tracy Rucinski, Editing by Rosalba O’Brien)
FRANKFURT (Reuters) – Daimler has cut its earnings outlook for this year after lifting provisions for issues related to its diesel vehicles by “a high three-digit million euro amount”, the carmaker said on Sunday.
Group earnings before interest and tax for 2019 are now expected to be at last year’s level. Previously, the carmaker had expected the figure to be “slightly higher”.
The revision is related to an increase in expected expenses linked to “various ongoing governmental proceedings and measures with regard to Mercedes-Benz diesel vehicles,” the company said.
A spokesman declined to elaborate on the nature of those issues.
However, Sunday’s profit warning follows news over the weekend that Daimler must recall 60,000 Mercedes diesel cars in Germany after regulators found that they were fitted with software aimed at distorting emissions tests.
The transportation ministry said it was expanding its investigation into further models.
The company also said it was reducing its forecast for the return on sales for Mercedes-Benz vans.
It now sees a return between minus 2% and minus 4%, below its previous forecast of a return on sales of 0% to 2%.
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)
Southwest Airlines continues to await guidance from Boeing and the Federal Aviation Administration (FAA) on the impending 737 MAX software enhancements and training requirements. We are encouraged by the reported progress and proposed path forward for returning the aircraft to service, and we remain confident that, once certified by the FAA, the enhancements will support the safe operation of the MAX.
In April, we revised our flight schedule by removing the MAX through Aug. 5 to offer reliability to our operation and stability for our Customers during the busy summer travel months. With the timing of the MAX’s return-to-service still uncertain, we are again revising our plans to remove the MAX from our schedule through Sept. 2.
By proactively removing the MAX from scheduled service, we can reduce last-minute flight cancellations and unexpected disruptions to our Customers’ travel plans. We will proactively contact all Customers whose itineraries will be impacted by the revision to offer them maximum flexibility and re-accommodate them well in advance of their travel date. The revision will proactively remove roughly 100 daily flights from our schedule out of our total peak-day schedule of more than 4,000 daily flights.
We offer our apologies to our Customers impacted by this change, and we thank them for their continued patience.
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)
American Airlines remains confident that impending software updates
to the Boeing 737 MAX, along with the new training elements Boeing is
developing in coordination with our union partners, will lead to
recertification of the aircraft soon. We have been in continuous contact
with the Federal Aviation Administration (FAA), Department of
Transportation (DOT), National Transportation Safety Board (NTSB) and
other regulatory authorities, and we are pleased with the progress to
date.
In April, American extended cancellations for the MAX through Aug.
19. We are now extending those cancellations through Sept. 3. By
extending the cancellations, our customers and team members can more
reliably plan their upcoming travel on American. In total, approximately
115 flights per day will be canceled through Sept. 3.
Our Reservations and Sales teams will continue to work closely with customers who are impacted by these cancellations.
Frequently asked questions
Question: My flight was previously scheduled on a MAX. Will it be canceled? Answer:
Not all flights that were previously scheduled on a MAX will be
canceled, as we plan to substitute other aircraft types. In total,
approximately 115 flights will be canceled per day.
Question: My flight wasn’t scheduled to be on a MAX. Why has it been canceled? Answer:
A flight that was not scheduled as a MAX flight might be canceled to
enable our team to cover a MAX route with a different aircraft. Our goal
is to minimize the impact to the smallest number of customers.
Question: How will customers know if they are impacted? Answer:
American’s Reservations team will contact affected customers directly
by email or telephone. Customers who booked through a travel agent will
be contacted by their agency directly.
Question: My flight was canceled and I don’t want to rebook. Can I get a refund? Answer: Yes. If a flight is canceled and a customer chooses to not be rebooked, they may request a full refund by visiting aa.com/refunds.
SAN FRANCISCO (Reuters) – Tesla shares extended their recent sell-off on Wednesday after Citi cut its price target on the struggling electric car maker, leaving buyers of its recent share offer, including Chief Executive Elon Musk, $175 million in the hole.
Tesla’s stock dropped 5.5% to $193.88, on track to close below $200 for the first time since late 2016. It has lost a fifth of its value since the company sold a $1.84 billion convertible bond and almost $900 million of stock on May 2 to raise fresh capital and give it more time to stop losing money.
Citi analyst Itay Michaeli, who has a “sell” rating on Tesla, cut his price target to $191 from $238. He pointed to a an email Musk sent to employees last week, telling them he would increase cost-cutting, and that the $2.7 billion in recently raised capital would give Tesla just 10 months to break even at the rate it burned cash in the first quarter.
“The recent reported internal memo, which seemingly called into question prior guidance, didn’t help the risk/reward calculus. The implications can be serious, since an automaker’s balance sheet is always subject to the confidence ‘spiral’ risk,” Michaeli wrote in a client note.
Consumer Reports warned on Wednesday that a recent update to Tesla’s Autopilot driver assistance software does not work well and could be unsafe.
“It doesn’t appear to react to brake lights or turn signals, it can’t anticipate what other drivers will do, and as a result, you constantly have to be one step ahead of it,” Jake Fisher, Consumer Reports’ senior director of auto testing, said in a news release.
Tesla did not immediately respond to a request for comment. On April 22, Musk told investors that driverless Tesla “robotaxis” would be available in some U.S. markets next year, a claim met by skepticism by some self-driving experts.
UPPING HIS STAKE
Musk is battling to convince investors that demand remains high for the Model 3, the sedan targeted to propel Tesla to sustainable profit, and that it can be delivered efficiently and swiftly to customers around the world. Tesla lost $702 million in the first quarter and warned that profit would be delayed until the latter half of the year.
On Monday, Musk exercised options to buy 175,000 Tesla shares at $31.17 per share, increasing his indirect stake in the company to 34,102,560 shares, according to a filing. With Tesla’s stock down 41% year to date, Musk’s shares, including 102,880 he bought in this month’s capital raise, were worth $6.6 billion on Wednesday.
Tesla’s debt has stalled at lows hit earlier this week. Its recently issued convertible bond due in 2024 priced at 89.09 cents on the dollar, a record low. Its $1.8 billion junk bond traded at 82.5 cents on the dollar, slightly up from the all-time lows it hit on Monday and Tuesday.
The cost to insure Tesla’s debt, as measured by its credit default swap, edged up to roughly 28% of the face value of Tesla’s 2025 bond, from 27.6 % the day before.
(Reporting by Noel Randewich; additional reporting by Kate Duguid in New York and Vibhuti Sharma in Bengalaru; editing by Nick Zieminski and Jonathan Oatis)
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)
