Boeing deliveries sink in first quarter after 737 MAX groundings

by Garry Watts April 13, 2019, 6:53
Boeing deliveries sink in first quarter after 737 MAX groundings

Chicago-based Boeing's first-quarter 737 deliveries tumbled about 33 percent, pushing total aircraft deliveries down 19% to 149 from a year earlier.

Southwest Airlines is Boeing's largest customer for the 737 Max 8.

The groundings forced Boeing to freeze deliveries of the 737 Max, which had been its fastest-selling aircraft.

American Airlines is cutting a key revenue estimate partly because of canceled flights due to the grounding of its Boeing 737 Max jets.

Several analysts have trimmed their Boeing profit forecasts in light of the MAX grounding. It has been actively communicating with Boeing concerning the issue, a senior manager said, and before any future moves are made, it must be determined whether the aircraft has a serious design flaw.

As reported earlier by CNN, Boeing may face compensation claims of more than US$2 billion, and that amount is still growing.

Boeing cuts production of 737 MAX after crashes
The fallout from Boeing's worst crisis in years still has no end in sight for airlines that operate the embattled 737 Max jet. Indonesian airline Garuda is the only company so far to publicly disclose it has cancelled an order for the planes.

A report into the March 10 Ethiopian crash showed the aircraft was subject to repeated nose down commands and that the pilots followed at least some of the procedures highlighted by Boeing and the FAA after the Lion Air crash to render MCAS ineffective. Meanwhile, airlines that own the almost 400 Max jets are cancelling flights. A total of 346 passengers and crew died in the crashes. It was the second fatal crash involving a Max in recent months.

The CAAC said last week that it has been invited to join the panel.

American said Tuesday that it canceled 1,200 flights during the quarter that ended March 31 because regulators grounded its 24 Max planes. "We will also work directly with our suppliers on their production plans to minimize operational disruption and financial impact of the production rate change", Muilenburg said. "As part of this effort, we're making progress on the 737 MAX software update that will prevent accidents like these from ever happening again", the CEO said in his statement.

Over the weekend, American removed the plane from its schedule through June 5 - six weeks longer than before - underlining the realization among airlines that the Max will be parked longer than previously expected.

Still, despite a series of adverse events in the first quarter that also included a US government shutdown and extreme weather, Kirby said the company would pay eligible employees a one-time $100 bonus on April 17.

Boeing's shares were down 1.4 per cent at $369.50 in afternoon trading.

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