DUBLIN (Reuters) – Brazilian low-cost carrier GOL, which has 130 of Boeing’s grounded 737 MAX jets on order, expects to be flying the jet by April and hopes to secure a compensation deal within months, chief financial officer Richard Lark said on Monday.
“We at GOL are planning April” for the jet’s return to service, Lark told journalists. He said he expected to finalize a deal with Boeing within months that would “make investors whole” for losses associated with the delivery delays.
(Reporting by Conor Humphries; editing by David Evans)
FILE PHOTO: An employee works near a Boeing 737 Max aircraft at Boeing’s 737 Max production facility in Renton
CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> on Tuesday beat Wall Street estimates for quarterly profit and held to its 2020 profit target, with a turnaround strategy overseen by its outgoing CEO underpinning growth even as the Boeing 737 MAX remains grounded.
Chicago-based United is one of three U.S. airlines cancelling more than 1,000 monthly flights in a hit to profits as the 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia. Boeing Co <BA> said on Tuesday it does not expect approval for the 737 MAX’s return to service until mid-year, later than previously forecast.
While United has warned of a hit from the MAX grounding, it did not disclose any estimated financial impact from the fallout and stood by its full-year adjusted EPS range of $11 to $13.
Total operating revenue rose 3.8% to $10.89 billion, boosted by strong travel demand and Chief Executive Oscar Munoz’s three-year strategy to build up the airline’s flight connections through its main U.S. hubs. United President Scott Kirby will succeed Munoz as CEO later this year.
Revenue per mile flown, a closely watched industry measurement, rose 0.8% in the fourth quarter and United forecast similar growth in the first quarter given solid bookings.
However, unit costs excluding fuel and profit-sharing expenses, a concern for investors in a year of contract negotiations with pilots, rose 2.7%.
United had already announced a non-cash impairment charge of $90 million in the fourth quarter related to its Hong Kong routes, following anti-government protests in the city.
Shares of United closed 4.4% lower at $85.79 before the earnings release, tracking sharp declines for U.S. airline and travel stocks on concerns over the Wuhan coronavirus in China, which J.P.Morgan analyst Jamie Baker said poses a near-term overhang for airlines.
United did not comment on the outbreak in its results but separately said there is no impact on its operations and it remains in close contact with U.S., Chinese and other Asian authorities on safety.
United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EST (1630 GMT).
Adjusted net income rose to $676 million, or $2.67 per share, in the fourth quarter to Dec. 31, from $657 million a year earlier, topping a Wall Street consensus forecast for $2.65 per share.
Fellow U.S. MAX operators Southwest Airlines Co <LUV> and American Airlines Group Inc <AAL> are due to report quarterly results on Thursday.
The three airlines are scheduling without the MAX until early June though that timeline will likely need to be pushed back following Tuesday’s guidance from Boeing.
United, which had 14 737 MAX jets in its fleet at the time of the grounding, said it plans to take delivery of 28 MAX variants in 2020 depending on U.S. regulatory approval and Boeing’s subsequent pace of production and deliveries.
Among other aircraft orders, it expects to take delivery of two Boeing 777-300’s and 15 Boeing 787’s in 2020 but has decided to assign its purchase obligations for 20 Embraer 175’s to one of its regional partners once each jet is delivered.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Dominic Roshan K L in Bengaluru; Editing by Matthew Lewis)
An American Airlines Boeing 737 MAX 8 flight approaches to land at Reagan National Airport in Washington
WASHINGTON (Reuters) – Boeing Co <BA> said on Friday it is addressing a new software issue discovered in Iowa last weekend during a technical review of the proposed update to the grounded Boeing 737 MAX, a development that could further delay the plane’s return to service.
“We are making necessary updates,” Boeing said in a statement. Officials at the planemaker said the issue relates to a software power-up monitoring function that verifies some system monitors are operating correctly.
One of the monitors was not being initiated correctly, officials said. The monitor check is prompted by a software command at airplane or system power up, and will set the appropriate indication if maintenance is required, company officials added.
The Federal Aviation Administration (FAA) did not immediately comment. ABC News reported the issue early Friday.
Boeing is halting production of the 737 MAX this month following the grounding in March of its best-selling plane after two fatal crashes in five months killed 346 people.
U.S. regulators are waiting for an update from Boeing on how they will resolve the issue. A U.S. official briefed on the matter said Friday the FAA is now unlikely to approve the plane’s return until March but it could take until April.
This week, American Airlines Group Inc <AAL> and Southwest Airlines Co <LUV> both said they would extend cancellations of MAX flights until early June.
Also this month, the FAA and Boeing said they were reviewing a wiring issue that could potentially cause a short circuit on the grounded 737 MAX. Officials said the review is looking at whether two bundles of wiring are too close together, which could lead to a short circuit and potentially result in a crash if pilots did not respond appropriately.
U.S. and European aviation safety regulators met with Boeing in an effort to complete a 737 MAX software documentation audit that was begun in November. Documentation requirements are central to certification for increasingly complex aircraft software, and can become a source of delays.
(Reporting by David Shepardson; Editing by Chris Reese and David Gregorio)
(Reuters) – Boeing Co <BA> reported its worst annual net orders in decades on Tuesday, along with its lowest numbers for plane deliveries in 11 years, as the grounding of its 737 MAX jet saw it fall far behind main competitor Airbus <EADSY>.
Boeing’s gross orders plunged 77% to 246 in 2019, while net orders after cancellations or conversions were just 54 airplanes compared with 893 the previous year.
After an accounting adjustment representing jets ordered in previous years but are now unlikely to be delivered, Boeing said its net total for orders this year sank to a negative 87 airplanes.
As a result, Boeing’s book-to-bill ratio, which measures orders against deliveries, came in at a negative 0.23 in 2019.
Boeing said unidentified customers canceled orders for three 787-9’s in December and another customer canceled an order for a 787-8.
Ten months after the MAX was grounded in March following two fatal crashes, Boeing still has a backlog of more than 5,400 orders for its long- and short-distance commercial jets.
By comparison, Airbus said earlier this month it racked up a net 768 orders last year after cancellations and delivered a record 863 planes.
Boeing said on Tuesday deliveries fell by 53% to 380 planes over the whole of last year, as the MAX’s grounding made it impossible for it to deliver the planes to customers, forcing it to halt production last month and lose the top spot to its European rival for the first time in eight years.
Planemakers receive most of their revenue when aircraft are delivered – minus accumulated progress payments – making final delivery crucial for their finances.
Analysts estimate that Boeing has been losing around $1 billion a month because of the grounding and it reported an almost $3 billion negative free cash flow in the third quarter. Fourth-quarter figures are due on Jan. 29.
Boeing parted ways with Chief Executive Officer Dennis Muilenburg last month as it became increasingly clear that he was making little headway in resolving the crisis.
The company is still working to fix the MAX and there is little clarity on when Boeing is likely to get the green light from regulators to bring the airplane back into service, making analysts and investors jittery about the company’s prospects in 2020.
(Reporting by Tim Hepher in Paris, and Ankit Ajmera and Rachit Vats in Bengaluru; Editing by Patrick Graham, Shounak Dasgupta and Amy Caren Daniel)
Unpainted Boeing 737 MAX aircraft are seen parked at Renton Municipal Airport in Renton
Boeing is recommending 737 MAX simulator training in addition to computer based training for all MAX pilots prior to return to service of the 737 MAX. This recommendation takes into account our unstinting commitment to the safe return of service as well as changes to the airplane and test results. Final determination will be established by the regulators.
“Safety is Boeing’s top priority,” said interim Boeing CEO Greg Smith. “Public, customer and stakeholder confidence in the 737 MAX is critically important to us and with that focus Boeing has decided to recommend MAX simulator training combined with computer-based training for all pilots prior to returning the MAX safely to service.”
(Reuters) – American Airlines Group Inc <AAL> said on Monday it had reached a confidential agreement with Boeing Co <BA> to address damages the airline incurred in 2019 due to the ongoing grounding of its fleet of Boeing 737 MAX aircraft.
American, the largest U.S. airline, said the compensation will be received over several years. The airline will use more than $30 million of the compensation for the airline’s 2019 employee profit-sharing program.
American said it does not expect any material financial impact of the agreement to be realized in its fourth-quarter 2019 earnings and it will continue talks regarding compensation for damages related to the MAX grounding beyond 2019.
The Association of Professional Flight Attendants, which represents American Airlines’ 28,000 flight attendants, said it welcomed the news about compensation, and was evaluating the details.
Boeing said it does not comment on discussions with airlines.
Boeing’s best-selling 737 MAX has been grounded since two fatal crashes in five months killed 346 people. The company is halting production this month. A number of airlines have struck confidential settlements with Boeing in recent weeks.
(Reporting by David Shepardson, Editing by Rosalba O’Brien)
An American Airlines Boeing 737 Max 8, on a flight from Miami to New York City, comes in for landing at LaGuardia Airport in New York
FILE PHOTO: Michael O’Leary of Ryanair at the Four Courts in Dublin
BERLIN (Reuters) – Ryanair <RYAAY> is prepared for further delays to the delivery of its Boeing <BA> 737 MAX airliners, its chief executive Michael O’Leary told German magazine Wirtschaftswoche, adding that he would only discuss compensation after the aircraft had been delivered.
The 737 MAX airliner has been grounded since March following two crashes which claimed 346 lives.
One of the world’s largest airlines, Ryanair has ordered 135 of the jets.
“We were meant to have 58 planes by the summer,” O’Leary said in the interview, extracts from which were published on Friday. “That went down to 30, then 20, then 10 and the latest is maybe only five. It’s possible we’ll only get the first jets in October 2020.”
In contrast to other airlines, including Turkish, Southwest Airlines <LUV> and Germany’s TUI <TUIFY>, which have already agreed compensation with Boeing, O’Leary added that he would only discuss compensation after the planes were delivered.
(Reporting by Thomas Escritt; editing by Thomas Seythal)
FILE PHOTO: Boeing 737 Max aircraft at Boeing’s 737 Max production facility in Renton
ISTANBUL (Reuters) – Turkish Airlines and Boeing have come to an agreement concerning compensation for certain losses caused by grounded and undelivered Boeing 737 Max aircraft, the Turkish airline said on Tuesday.
The statement to the Istanbul stock exchange did not specify the value of the deal. The airline has 24 Boeing 737 MAX planes in its fleet. The 737 MAX has been grounded since March after two crashes in Indonesia and Ethiopia killed 346 people within five months.
(Reporting by Ceyda Caglayan; Editing by Daren Butler)
(Reuters) – At least 15 people were injured on Friday after a liquid nitrogen line exploded at a Textron Aviation plant near Wichita, Kansas, potentially setting back the launch of a new aircraft under development, county and company officials said.
Image from dailymail.co.uk
Emergency medical services took 11 people to the hospital, one of them suffering potentially serious injuries, Dr. John Gallagher, director of Sedgwick County EMS, told a news conference.
Company officials said two of victims went to the hospital in private cars and two were treated at the scene.
Injuries were limited because only a skeleton crew was on duty during the holidays, said Deputy Chief Daniel Wegner of the Sedgwick County Fire Department.
The explosion in a 3-inch liquid nitrogen gas line also damaged a storage tank, causing nitrogen gas to vent out of the building, Wegner said.
News video from the scene showed what appeared to be a steam cloud billowing out of the damaged building. The gas was not harmful, Wegner said.
A second valve also ruptured, said Kate Flavin, a spokeswoman for Sedgwick County, and emergency crews vented nitrogen gas from the affected tanks before doing another search of the plant.
No others were found injured and control of the facility was returned to Textron shortly after noon, but emergency crews remained on standby at the scene, she said.
Damage was contained to Plant 3, a site for composite manufacturing and experimental aircraft fabrication including that of the SkyCourier, said Stephanie Harder, a spokeswoman for Textron.
The SkyCourier, a utility turboprop under development, is due to enter service in 2020, Textron has previously said. Harder said it was too early to determine what damage the prototype aircraft under production may have suffered.
Textron Aviation, a unit of Textron Inc (TXT), makes Beechcraft and Cessna aircraft.
The Wichita-area economy has long been supported by aircraft manufacturing. Boeing Co (BA) announced in January it would suspend production of its 737 Max jetliner, which has been grounded worldwide after two fatal crashes. That move affected workers at Spirit AeroSystems in Wichita, Boeing’s top supplier, which produces the jet’s fuselages.
Reporting by Daniel Trotta, Additional reporting by Rich McKay; Editing by Daniel Wallis, Bill Tarrant and Richard Chang
BEIJING (Reuters) – The sixth prototype of China’s home-built C919 narrowbody passenger plane completed its first test flight on Friday, marking a milestone in the programme’s testing schedule as China races to compete with Airbus SE and Boeing Co.
The sixth prototype is the last test plane its manufacturer, the Commercial Aircraft Corp of China Ltd (COMAC), has planned for the programme and was scheduled to fly before the year-end. Currently, there are five test planes that are conducting test flights elsewhere in the country.
The maiden flight on Friday from Shanghai lasted two hours and five minutes, COMAC said in a press release, adding that the jet will be conducting more test flights with a focus on cabin, lighting and external noises.
COMAC has already started production of aircraft parts which will be used for the first batch of aircraft deliveries, it said.
The state manufacturer is aiming to obtain Chinese certification for the C919 in 2021, but the date was subject to regulatory approval and the aircraft’s safety remains a top priority, according to COMAC officials.
He Dongfeng, the Communist Party boss of COMAC, wrote in a state-owned newspaper in December that aircraft safety is key to the survival of COMAC.
Designed to compete directly with the Airbus 320 and the Boeing 737 families in the market for jets with around 150 seats, the C919 is the speartip of China’s efforts to break a powerful decades-old Western duopoly.
The Boeing 737 MAX remains globally grounded following two fatal crashes that killed a total of 346 people.
(Reporting by Stella Qiu and Brenda Goh; Editing by Muralikumar Anantharaman)
