Ethiopian Airlines Crash/ B737MAX grounding

Spanish Eyes

Boeing to stop max in January. Only breaking, so more to follow I suppose.

https://www.cnbc.com/2019/12/16/boeing-will-suspend-737-max-production-in-january.html

Geuze

Inquitus wrote: »

Why would anyone buy a 737-NG when it is 20-30% less efficient than a Max or a Neo A320? Not withstanding its issue with slats and pickle forks. It is not a plane of the future, but one that was rightly replaced with more modern engines, even if that replacement is now banned from flying.

Ok, so if the 737 MAX production is suspended, and the previous generation aren't being built, or are not wanted, then if an airline wants to buy aircraft of the 737 size, they will have to buy from Airbus?

L1011

Geuze wrote: »

Ok, so if the 737 MAX production is suspended, and the previous generation aren't being built, or are not wanted, then if an airline wants to buy aircraft of the 737 size, they will have to buy from Airbus?

Yes, and wait many many years too.

cnocbui

You would think Airbus ought to be having a hard think about opening a new production facility or expanding existing ones.

Strike while the iron is hot - and all that.

Bob24

cnocbui wrote: »

You would think Airbus ought to be having a hard think about opening a new production facility or expanding existing ones.

Strike while the iron is hot - and all that.

From a Chinese perspective they must also be working hard to make sure the commercial launch of the Comac C919 isn’t delayed.

If Boeing’s issues don’t get sorted soon, it could be a golden opportunity to launch a new narrow-body they would never have dreamed of.

Geuze

L1011 wrote: »

Yes, and wait many many years too.

OK, so FR growth plans will be seriously affected?

L1011

Geuze wrote: »

OK, so FR growth plans will be seriously affected?

Yes - and unless they cease fleet retirement/sale plans they could end up in contraction. You can assume they will stop sales and reduce/stop lease returns anyway.

Phil.x

I said early on Boeing needed to quickly replace this model, be that with a few safety mods and cowling and rename the max bit and i was shouted down like a mad man, now if i can only find that post.

L1011

Phil.x wrote: »

I said early on Boeing needed to quickly replace this model, be that with a few safety mods and cowling and rename the max bit and i was shouted down like a mad man, now if i can only find that post.

That's realistically not certifiable, that's the problem. Although they've tried the rename on the still not flying "737-8200" for Ryanair etc.

Enough has come out in the intervening period to put the certification of the NG in to doubt really.

Jeff2

Spanish Eyes wrote: »

Boeing to stop max in January. Only breaking, so more to follow I suppose.

https://www.cnbc.com/2019/12/16/boeing-will-suspend-737-max-production-in-january.html

About time I'd say.

The thing can't fly at the moment and is worthless to them.

murphaph

I wonder what other defects are lurking in all those parked and grounded maxes. The factory was disorganised chaos according to a senior whistleblower. Handovers between shifts weren't even being done. These planes could be ticking time bombs in other respects beyond MCAS. I'll be giving them a wide berth for a year or two if they ever do get certified.

Bob24

murphaph wrote: »

I wonder what other defects are lurking in all those parked and grounded maxes. The factory was disorganised chaos according to a senior whistleblower. Handovers between shifts weren't even being done. These planes could be ticking time bombs in other respects beyond MCAS. I'll be giving them a wide berth for a year or two if they ever do get certified.

Agree, not to mention the extended storage period whereby additional issues could develop.

Whenever service resumes, they’d better double and triple check these before delivering them to the airlines. Any serious enough issue with one of these after they enter service (even one not causing fatalities) and the Max is a goner.

banie01

cnocbui wrote: »

You would think Airbus ought to be having a hard think about opening a new production facility or expanding existing ones.

Strike while the iron is hot - and all that.

The Chinese facility is expanding, the American facility is currently only building 5 neos per month with a ramp plan to 6.
Ideally a large increase in the Stateside facility would allow a quick increase in throughput with the added benefit of dodging the 10% tariff the WTO have imposed on Airbus' US imports.

Even with a magic wand, there is no quick means for Airbus to plug the gap.
It will be years before any noticeable impact is seen from immediate expansion.

Nijmegen

Anyone ever read Michael Crichton's "Airframe"? Starting to feel like it here with Boeing.

L1011

Well worth reading - just maybe not on a plane! Possibly the only Crichton work not yet made in to a film or TV show cause of the cost of the flight scenes, particularly when it came out. Was jabbing at McDD at the time but Boeing has basically become McDD in terms of engineering management

CJhaughey

L1011 wrote: »

Well worth reading - just maybe not on a plane! Possibly the only Crichton work not yet made in to a film or TV show cause of the cost of the flight scenes, particularly when it came out. Was jabbing at McDD at the time but Boeing has basically become McDD in terms of engineering management

IMHO one of the reasons that Boeing has found itself in this situation is because of the MDD management that was integrated into Boeing.

Fritzbox

Bob24 wrote: »

From a Chinese perspective they must also be working hard to make sure the commercial launch of the Comac C919 isn’t delayed.

If Boeing’s issues don’t get sorted soon, it could be a golden opportunity to launch a new narrow-body they would never have dreamed of.

I don't think anyone is in a hurry to buy the Comac 919. Who has ordered this airliner outside China?

L1011

CJhaughey wrote: »

IMHO one of the reasons that Boeing has found itself in this situation is because of the MDD management that was integrated into Boeing.

I'd say it's the main reason. McDonnell killed Douglas and are now doing it to Boeing

Fritzbox

L1011 wrote: »

I'd say it's the main reason. McDonnell killed Douglas and are now doing it to Boeing

That sounds very negative - there is every reason to believe Boeing will survive for a long time yet - it is still a huge and profitable company today.

murphaph

Fritzbox wrote: »

That sounds very negative - there is every reason to believe Boeing will survive for a long time yet - it is still a huge and profitable company today.

Douglas and McDonnell were presumably profitable at one time too.

banie01

L1011 wrote: »

I'd say it's the main reason. McDonnell killed Douglas and are now doing it to Boeing

100% managing to the bottom line rather than accepted engineering norm with safety margin.
Boeing have become renowned in the recent past for over-promising and under-delivering, particularly on the military side.
Both you and I have been flagging the McD issues and the likelihood of at least a long hiatus for the Max for quite a while at this stage.

It is quite strange to see people still buying into the Boeing line of being near a return to service as recently as a couple of days ago.

Southwest have already announced that part of the compensation offered by Boeing will be added to their profit share fund.
Southwest pilots have launched a lawsuit against Boeing to recoup their lost earnings as a result of the grounding.

Ryanair will no doubt have significant penalty clauses in their purchase and options contracts, but their entire fleet renewal plan and growth strategy is laid waste as a result of Boeing's short cuts.

It's only in the last week that trade indicators for Boeing stock have shifted to sell.
There is still a lot more mud to come yet, the 777-X and the regulatory oversight afforded to every FAA certified design over the past 20 years is now suspect, not just Boeing but luckily for the US they don't really have another player in the market.

This issue doesn't just taint Boeing, it taints the entire US regulatory and certification process.

Bob24

Fritzbox wrote: »

I don't think anyone is in a hurry to buy the Comac 919. Who has ordered this airliner outside China?

True (I don’t believe any non-Chinese airline has ordered and I assume certification outside China will take some time), hence my comment this could be a golden opportunity.

Realistically, interest for a first generation Chinese 320/737 competitor is low outside China as the first gen will probably be a bit rough around the edges v.s. what Airbus and Boeing have to offer (and it wouldn’t have a track record).

But now if Boeing isn’t able to deliver a certified plane for another while and/or takes time to resume full production levels while Airbus doesn’t have the capacity to fill the gap; this is when airline execs outside China might start thinking about whether that Chinese option might be be an interesting idea. And even if Airbus was able to ramp-up production I don’t think the airline industry would want to give them a monopoly on this segment, so if It looked like Boeing is losing grip, any potential newcomer would be seen as something that needs to supported.

In short, I am not saying it would be an easy sell for Comac, but that would be as good as market conditions could be for them and an opportunity window they definitly wouldn’t want to miss.

Cookiemunster

Bob24 wrote: »

True (I don’t believe any non-Chinese airline has ordered), hence my comment this could be a golden opportunity.

Realistically, interest for a first generation Chinese 320/737 competitor is low outside China as the first gen will probably be a bit rough around the edges v.s. what Airbus and Boeing have to offer (and it wouldn’t have a track record).

But now if Boeing isn’t able to deliver a certified plane for another while and/or takes time to resume full production levels while Airbus doesn’t have the capacity to fill the gap; this is when airline execs outside China might start thinking about whether that Chinese option might be be an interesting idea. And even if Airbus was able to ramp-up production I don’t think the airline industry would want to give them a monopoly on this segment, so if It looked like Boeing is losing grip, any potential newcomer would be seen as something that needs to supported.

In short, I am not saying it would be an easy sell for Comac, but that would be as good as market conditions could be for them and an opportunity window they definitly wouldn’t want to miss.

The C919 is at least 2 years away from entering service. There's only 5 of them actually built. They're not going to be filling any gaps any time soon.

Bob24

Cookiemunster wrote: »

The C919 is at least 2 years away from entering service. There's only 5 of them actually built. They're not going to be filling any gaps any time soon.

Their plan is to enter the market at some point in 2021, so if they manage follow it, it means one to two years.

For sure this is a medium term rather than short term thing ... but by the time Boeing gets the Max re-certified and flying and resumes full scale production, there will be a backlog and a trust issue - and the C919 might not be that far off anymore.

Granted, if the Max in back in the sky and in production in 2 months time the above won’t really come into play. But Boeing has now being promising to have it back in service within 2 months for about 6 months, and have just announced they are stopping production (which will take some time to restart if and when they are ready resume it) ... so who knows it could be 6 months or even more before they start coming out of the factory again (I am assuming if they are stopping production - a very dramatic and costly decision - it means they aren’t hopeful at all to resume deliveries for at least several months).

Geuze

What about Bombardier?

Do or can they make an equivalent to B737 MAX?

Inquitus

Geuze wrote: »

What about Bombardier?

Do or can they make an equivalent to B737 MAX?

Nope they go for the small end of the market, and their biggest plane is now part of the Airbus Fleet, the A220.

banie01

Geuze wrote: »

What about Bombardier?

Do or can they make an equivalent to B737 MAX?

Sold off their narrow body to Airbus and it's in production and service as the A220.

Again capacity and throughout would be an issue, as would the size.
It will need a stretch to compete directly and that would likely eat into the NEO order book.

banie01

Timaero ( Irish flagged leasing company) have filed suit seeking to cancel their MAX order aswell as seeking damages of $185 million.

Lawsuit filed alleges fraud in so far as Boeing

"Boeing deliberately and knowingly failed to disclose ... the safety issues associated with the design of the 737 Max," the company said.

https://edition.cnn.com/2019/12/18/business/boeing-sued-timaero-737-max/index.html

Boeing have booked @$5billion against their P&L to cover lawsuits and compensation but there are some analysts who put the likely liability at closer to $15billion.
Their cash pile will be burnt faster than Escobar's keeping his kid warm

https://edition.cnn.com/2019/12/17/business/boeing-737-max-outlook/index.html

Blut2

They're still paying out a dividend too, I believe. Which is just madness, given the cash crunch about to hit them. It just shows how obsessed with share price value the board are, to a point above all other considerations.

Damien360

Blut2 wrote: »

They're still paying out a dividend too, I believe. Which is just madness, given the cash crunch about to hit them. It just shows how obsessed with share price value the board are, to a point above all other considerations.

This is true of pretty much all stock market listed companies. The CEO’s job depends on stock value, everything else is incidental.