Abu Dhabi, UAETuesday 12 November 2019

Boeing may halt 737 Max production if grounding is prolonged

Plane maker expects the aircraft to return to the skies by the fourth quarter of this year

An aerial view of Boeing 737 Max 8 aircraft sitting parked at Boeing Field in Seattle, Washington. EPA 
An aerial view of Boeing 737 Max 8 aircraft sitting parked at Boeing Field in Seattle, Washington. EPA 

Boeing may temporarily halt production of its troubled 737 Max aircraft if it doesn't get approval from aviation regulators to return the jet to the skies beyond its current estimates of when the plane should be back in service, the company's chief executive said.

Speaking on the second quarter earnings call on Wednesday, Dennis Muilenburg said that the US plane maker's "best current estimate" for the 737 Max to start flying again by early in the fourth quarter of this year.

Boeing took a decision to reduce production for the plane to 42 units per month in April, and Mr Muilenburg said that a fourth quarter return would allow Boeing to continue at this rate before gradually increasing production to 57 units per month by 2020.

However, he also warned that this could change if there are any delays.

"Should our estimate of the anticipated return to service change, we might need to consider possible further rate reductions or other options, including a temporary shutdown of the Max production," Mr Muilenburg said.

Ultimately, he said, it was the US Federal Aviation Administration and other global aviation regulators that would determine when the grounding of the 737 Max is lifted.

"We are committed to working with these regulators to satisfy all of their requirements and to ensure the 737 Max's safe return to service."

Boeing swung to a second quarter loss of $2.94 billion (Dh10.8bn) on Tuesday, from a profit of $2.2bn it reported for the same period in 2018. The plane maker blamed charges related to the 737 Max programme for its quarterly loss. Earlier this month, the company announced that it had taken a $5.6bn charge against earnings to compensate customers for the delayed delivery of 737 Max units.

The 737 Max was grounded by aviation regulators across the globe in March after an Ethiopian Airlines flight crashed, killing all 157 people on board. This followed an earlier 737 Max crash in October last year of a flight operated by Indonesia's Lion Air in which 189 people died.

Boeing pledged $100 million to victims' families earlier this month, of which Mr Muilenburg said $50m was being made available to "provide near-term financial assistance" .

Updated: July 26, 2019 02:39 AM

SHARE

SHARE