Go Back  PPRuNe Forums > Flight Deck Forums > Rumours & News
Reload this Page >

MAX’s Return Delayed by FAA Reevaluation of 737 Safety Procedures

Rumours & News Reporting Points that may affect our jobs or lives as professional pilots. Also, items that may be of interest to professional pilots.

MAX’s Return Delayed by FAA Reevaluation of 737 Safety Procedures

Old 29th Aug 2019, 02:29
  #2081 (permalink)  
 
Join Date: Jul 2010
Location: Asia
Posts: 550
This could open the floodgates, how many other airlines have ordered and received the MAX or have unfulfilled orders for the aircraft but had routes and timetables already in place based on its arrival on a specific date ? The Lawyers must be rubbing their hands at the thought of the potential fees.

Chapter 11 bankruptcy protection might be the next step as there is no way Boeing could pay out for all the lost income airlines have suffered due to the grounding.
krismiler is offline  
Old 29th Aug 2019, 05:48
  #2082 (permalink)  
 
Join Date: Mar 2015
Location: Washington state
Posts: 172
I am pretty sure that Boeing knows how to write a contract, getting a manufacturer to give you a date certain on delivery is practically impossible -- at least I have never seen it in my (albeit limited) experience. There could be an earthquake, or a strike, or an unexpected manufacturing glitch in any product delivery. Probably most of what liability they have is covered by insurance, unless insurance can claim that Boeing was doing this all knowingly or deliberately.

The grounded planes may be another matter, although I suppose that could be covered by the contract as well. It is not unheard of for planes to be grounded to fix technical problems, and the timeline for restart is not entirely up to Boeing. Even if there is a good case, unless they are backed by a nation state trying to cause trouble I don't see any airlines trying to force one of their two possible suppliers into bankruptcy; they would be bankrupt themselves (and everybody involved retired) before any possible payout was even contemplated.
Water pilot is offline  
Old 29th Aug 2019, 09:22
  #2083 (permalink)  
 
Join Date: Apr 2018
Location: Sudbury, Suffolk
Posts: 134
I suspect that our legal friends are looking forward to testing the meaning of such words as "reasonable" and "force majeur"
Maninthebar is offline  
Old 29th Aug 2019, 12:21
  #2084 (permalink)  
 
Join Date: Jan 2008
Location: Australia
Posts: 62
Southwest will retain 'Max' moniker when grounding lifts

https://www.flightglobal.com/news/ar...ding-l-460469/
artee is offline  
Old 29th Aug 2019, 12:28
  #2085 (permalink)  
 
Join Date: Jul 2002
Location: Ireland
Posts: 595
Originally Posted by krismiler View Post

Chapter 11 bankruptcy protection might be the next step as there is no way Boeing could pay out for all the lost income airlines have suffered due to the grounding.
Close business partners rarely sue each other or force bankruptcy as neither end up winning.

Airline losses will be dealt with over a period of time as a mixture of cash payments, price cuts on future orders and more favourable payment terms.
Speed of Sound is offline  
Old 29th Aug 2019, 16:08
  #2086 (permalink)  
Thread Starter
 
Join Date: Apr 2015
Location: Under the radar, over the rainbow
Posts: 458
Originally Posted by cooperplace View Post
Really? Do you care to elaborate on their reasons? Maybe they feel their employer works them too hard? Or are there reports of poor quality? or something else?
Claims of Shoddy Production Draw Scrutiny to a Second Boeing Jet

Federal investigation now includes Boeing's North Charleston Dreamliner plant

Airline surveys point to ongoing production problems at Boeing's S.C. plant
OldnGrounded is offline  
Old 29th Aug 2019, 18:39
  #2087 (permalink)  
 
Join Date: Jul 2010
Location: Asia
Posts: 550
Airline losses will be dealt with over a period of time as a mixture of cash payments, price cuts on future orders and more favourable payment terms.
Committed, long term Boeing customers such as Southwest or Ryanair would likely take that option. Smaller operators with only a few aircraft on order who aren't as tied into Boeing might take a less charitable view and demand monetary compensation with a much shorter time frame, particularly if they have been pushed into the red and are struggling to survive. There could be a class action lawsuit against Boeing as so many different parties are involved.

I suspect that our legal friends are looking forward to testing the meaning of such words as "reasonable" and "force majeur"
I suspect our legal friends are looking forward to their fees, many lawyers will be able to retire and not have to work again out of this.
krismiler is offline  
Old 29th Aug 2019, 18:49
  #2088 (permalink)  
 
Join Date: Jul 2002
Location: Ireland
Posts: 595
Smile

Originally Posted by artee View Post
Southwest will retain 'Max' moniker when grounding lifts

https://www.flightglobal.com/news/ar...ding-l-460469/
No surprise there.

A company operating the largest fleet of 737MAX in the world would struggle to convince many customers that they didn’t!
Speed of Sound is offline  
Old 29th Aug 2019, 20:19
  #2089 (permalink)  
 
Join Date: Mar 2007
Location: USofA
Posts: 1,072
I think Boeing has enough money that they could pay this out of the office flower fund. BK is not even considered at this time.
Spooky 2 is offline  
Old 29th Aug 2019, 21:56
  #2090 (permalink)  
Thread Starter
 
Join Date: Apr 2015
Location: Under the radar, over the rainbow
Posts: 458
Originally Posted by Spooky 2 View Post
I think Boeing has enough money that they could pay this out of the office flower fund. BK is not even considered at this time.
I'm sure you're right about bankruptcy not being under consideration. On the other hand, credible analysts have been suggesting that this mess may ultimately cost Boeing more than $10 billion (charges in the neighborhood of $8 billion have already been announced). That's pretty close to the company's pretax income for 2018. And it's easy to imagine the total being significantly more than that, depending upon what the ultimate impact on sales and selling prices might be.

They don't spend that much on flowers.
OldnGrounded is offline  
Old 29th Aug 2019, 22:18
  #2091 (permalink)  
 
Join Date: Mar 2007
Location: USofA
Posts: 1,072
I actually had a former Boeing VP tell me they bought 15 billion would close to the final number when it's all over.
Spooky 2 is offline  
Old 29th Aug 2019, 22:33
  #2092 (permalink)  
 
Join Date: Apr 2011
Location: aus
Posts: 50
Originally Posted by OldnGrounded View Post
IThat's pretty close to the company's pretax income for 2018.
They also had north of 70 bil in the bank a few years back. Used the majority of that for share buybacks. So while bankrupcy is not really on the cards they might have to do a share issue to make some cash, it would be selling shares they only recently bought back
rattman is offline  
Old 29th Aug 2019, 23:17
  #2093 (permalink)  
 
Join Date: Jul 2010
Location: Freedom Sound
Posts: 106
Words "peanuts" and "monkeys" spring to mind if it is true that they are only paying some assembly workers 9$ an hour!
esscee is offline  
Old 30th Aug 2019, 02:40
  #2094 (permalink)  
 
Join Date: Feb 2014
Location: Crawley
Age: 62
Posts: 86
"earlier-generation 737NG." Isn't that an oxymoron?
nevillestyke is offline  
Old 30th Aug 2019, 02:52
  #2095 (permalink)  
 
Join Date: Jul 2010
Location: Asia
Posts: 550
Chapter 11 is bankruptcy protection and enables a company to reorganise whilst being protected from its creditors, the idea is to have the company emerge as a viable entity rather than be carved up and the creditors receiving X number of cents on the dollar of their claims. As stated earlier, time is the main factor, the longer it goes on the worse it gets. Boeing is too big to fail, especially with Donald Trump in office.

The company's lawyers will no doubt have come up with a number a possible scenarios and strategies to deal with them. Chapter 11 would be an absolute worst case assuming the MAX never flies again, Boeing is on the hook for lost income compensation to the airlines which bought the MAX, all the aircraft already produced have to be scrapped, and the costs involved in developing a new narrow body whilst their income is reduced to defence and widebody divisions only.

So while bankruptcy is not really on the cards they might have to do a share issue to make some cash, it would be selling shares they only recently bought back
This would certainly incur another huge loss as the price they paid would be substantially more then they would receive at the moment and dumping a huge number of shares on the market would depress the price even further.

Even a best case scenario of the MAX returning to service late this year and the lawyers managing to minimise any claims will still leave them billions of dollars out of pocket but would avoid the stigma of bankruptcy protection.
krismiler is offline  
Old 30th Aug 2019, 12:00
  #2096 (permalink)  
 
Join Date: Apr 2002
Location: the edge of madness
Posts: 491
It isn't in the interest of Boeing's MAX customers to bankrupt the company, just as it hasn't been for Trent 1000 customers to bankrupt RR. Certainly, in the latter case, a desire for compensation was tempered with a pragmatism that they needed RR to survive to continue to fix the problem.
Torquelink is offline  
Old 30th Aug 2019, 12:02
  #2097 (permalink)  
 
Join Date: Feb 2003
Location: uk
Posts: 2,856
The posts about out-sourcing are interesting.

But to what extent is Boeing, or any aircraft design organisation, expected to understand how all these out-sourced components behave when bolted together?

It is now over 30 years since the UK Air Accidents Investigation Branch trashed Boeing for not understanding how simple actuators worked in Chinook, after a fatal accident. Five years later, the RAF Director of Flight Safety said the company (Boeing Helicopters/Vertol) was unsuited to being a Design Authority, partly due to the same lack of understanding. The following year the company admitted it hadn't a scoobie about how new fuel computers and software worked.

There is something in the ethos of the company that worries me. These problems are recurring. There's a lot of people in MoD UK thinking - released an aircraft with dodgy safety critical software? - been there before. It can't all be down to downsizing and savings.
tucumseh is offline  
Old 30th Aug 2019, 12:23
  #2098 (permalink)  
 
Join Date: Oct 2002
Location: London UK
Posts: 6,255
Originally Posted by krismiler View Post
This could open the floodgates, how many other airlines have ordered and received the MAX or have unfulfilled orders for the aircraft but had routes and timetables already in place based on its arrival on a specific date ?
Probably all of them. You don't order new aircraft at USD 120m a pop without having a very good idea of exactly how you are going to use them for revenue generation, worked out to the day. Your funder would want to see the detail of such plans before they even think about financing the deal.

Just as much an issue is disposing of the old fleet, which will also have been prearranged. The lease may say it's extendible, but that's normally at standard rates rather than the great concessionary rate you have been paying over time. I believe rates for mid-life 737NGs have gone through the roof, because not only are none being released onto the market, but those with Max fleets which were in use are having to go out and try and get replacements.

WHBM is offline  
Old 30th Aug 2019, 12:26
  #2099 (permalink)  
 
Join Date: Jul 2002
Location: Ireland
Posts: 595
Originally Posted by tucumseh View Post

It can't all be down to downsizing and savings.
Well in the case of the MAX it certainly was down to savings.

Quite simply, Boeing tried to make the 737 more fuel efficient by fitting a 2.5 metre diameter engine to an airframe originally designed for, and fitted with a 1.25 metre diameter engine. MCAS came about to avoid redesign/recertification and huge savings in training costs to their clients allowing Boeing to knock $1 million off the list price of each aircraft. Once the MCAS route was decided upon, further savings were made by including virtually no redundancy, altering trim logic and setting up a massive ‘gotcha’ which claimed 346 lives.

This was very much about making savings, as the technology and skills existed for a better solution but were simply not chosen.
Speed of Sound is offline  
Old 30th Aug 2019, 19:22
  #2100 (permalink)  
 
Join Date: Nov 2010
Location: Atlanta
Age: 52
Posts: 17
Originally Posted by nevillestyke View Post
"earlier-generation 737NG." Isn't that an oxymoron?
I think " 737G " would have covered it....
hans brinker is offline  

Thread Tools
Search this Thread

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.