Boe­ing de­lays 737 Max re­turn un­til mid-2020

Muscat Daily - - BUSINESS -

New York, US – Boe­ing has of­fi­cially pushed back the time­frame for the 737 Max to re­turn to the skies, send­ing shares plung­ing and over­shad­ow­ing an ear­lier an­nounce­ment of a first flight of the de­layed 777X plane.

Boe­ing said it is now tar­get­ing the re­turn of the grounded Max ‘dur­ing mid-2020’, the lat­est de­lay in the sched­ule for the trou­bled jet, which has been grounded since March fol­low­ing two deadly crashes.

Boe­ing is in the process of rais­ing at least US$10bn from Wall Street banks to cover costs con­nected to the Max cri­sis, bank sources said Mon­day.

Boe­ing has told cus­tomers and sup­pli­ers ‘that we are cur­rently es­ti­mat­ing that the un­ground­ing of the 737 Max will be­gin dur­ing mid-2020’, the com­pany said in a state­ment.

That marked a shift from Boe­ing’s most re­cent stance on its top-sell­ing air­craft when it elim­i­nated a tar­get date en­tirely af­ter re­peat­edly fail­ing to keep to timeta­bles in 2019. But even the vague mid-2020 tar­get is later than some an­a­lysts had ex­pected and it prob­a­bly rep­re­sents a best-case sce­nario that could again be pushed back.

The US Fed­eral Avi­a­tion Ad­min­is­tra­tion (FAA) had pub­licly crit­i­cised Boe­ing for con­tin­u­ally tout­ing its ag­gres­sive time­frame in public for the Max’s re­turn, sug­gest­ing the tar­get was a tool for pres­sur­ing the agency into ap­prov­ing the plane more quickly.

On Tues­day, an FAA spokesman re­it­er­ated that it has set ‘no time­frame’ for the Max’s cer­ti­fi­ca­tion. ‘We con­tinue to work with other safety reg­u­la­tors to re­view Boe­ing’s work as the com­pany con­ducts the re­quired safety as­sess­ments and ad­dresses all is­sues that arise dur­ing test­ing,’ the FAA said.

Mean­while, Boe­ing is seek­ing some US$10bn in loans to deal with swelling costs for the Max which have reached US$9.2bn based on com­pany dis­clo­sures thus far. But the num­ber is ex­pected to rise when the com­pany re­ports earn­ings later this month.

Boe­ing’s Max bill in­cludes com­pen­sat­ing air­lines for de­layed de­liv­er­ies and lost ser­vice on thou­sands of Max flights, pay­ing out le­gal set­tle­ments to vic­tims, stor­ing and main­tain­ing hun­dreds of Max planes that have been built but not de­liv­ered and man­ag­ing costs across the Max pro­gramme dur­ing the pe­riod be­fore Boe­ing halted out­put com­pletely.

Pres­i­dent Don­ald Trump on Wed­nes­day crit­i­cised Boe­ing as a ‘very dis­ap­point­ing com­pany’ be­cause of the aero­space gi­ant’s re­cent prob­lems af­ter the ground­ing of the 737 Max plane, which he said had a knock-on ef­fect for the US econ­omy.

“This is one of the great companies of the world, let’s say as of a year ago, and then all of a sud­den things hap­pen,” Trump said in an in­ter­view on CNBC from the Davos eco­nomic fo­rum in Switzer­land.

This ‘had a tremen­dous im­pact. You know, when you talk about growth, it’s so big that some peo­ple say it’s more than a half a point of GDP. So Boe­ing - big, big dis­ap­point­ment to me’, he said.

(Bloomberg)

Grounded Boe­ing Co 737 Max air­planes are seen parked in a lot near Boe­ing Field in Seat­tle, US

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