The US key producer of the airplane, Boeing, is likely to reduce or suspend the production of the controversial commercial aircraft, 737 Max. Boeing’s Max had been grounded since mid-March 2019 after it to airplanes crashed twice in a span of five months and claimed 346 lives. The first crash happened in Indonesia in October 2018 and another in Ethiopia in March 2019.
No Re-operating Service before 2020
The US Federal Aviation Administration (FAA) announced in early December 2019 that Boeing’s Max would not be functioning till 2020. According to Reuters, “The Board of the aircraft company is holding a regular two-day meeting in Chicago, which started on Sunday, and the company could make an announcement on production plans as soon as late on Monday.”
The company, on several occasions, had informed its investors that the output of the planes could be temporarily stopped if the banned on Max continued longer. According to Dennis Muilenburg, Boeing’s CEO explained that the company preferred to suspend production, as it could be more effective ways than reducing the output.
The company reduced its output of 20% in April 2019, which decreased production to 42 aircraft from 52 in April due to the crashes. The company had more than 300 Boeing 737 Max planes operating worldwide before being grounded in March and had more than 4,000 orders of the planes from different countries.
Grounding the aircraft was a response from various airspace regulators around the globe. The company is facing a financial crunch, as it had already borrowed nearly $5 billion for expenditures incurred being grounded.
Additionally, the regulators are not likely to grant approval for the company’s re-operation of Max till 2020. Steve Dickson, the Chief of the FAA, reported CNBN, “The regulator would not likely velar the 737 Max’s return until sometime in 2020.”
The Prevailing Conditions of Boeing
As reported by CNBC, “The prolonged grounding has forced Boeing to consider scaling back a planned ramp-up in production next year. Boeing shares are down about 20% since the second crash in March, yet a slight share up 6% so far this year.”
Responding to a question, a Boeing’s spokesman commented that the company has been “Talking closely with the FAA and global regulators towards certification and the safe return to service of the Max. We will continue to assess production decisions based on the timing and conditions of return to service, which will be based on regulatory approvals and may vary by jurisdiction.” However, it is still uncertain for Boeing about the timeline for the re-operation of its service.
According to a CNBC report, “Boeing continues to pursue a return-to-service schedule that is not realistic due to delays that have accumulated for a variety of reasons.” Meanwhile, the Bank of America Merrill Lynch’s survey found that the air travelers were hesitant to travel in 737 Max.
According to the survey, “Nearly two-thirds of those surveyed said they would wait at least six months before flying or never fly it, while most respondents said they would switch to another aircraft if they had the opportunity.”
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