Southwest does not plan to use Boeing Max jets before August – Business News

DALLAS (AP) – Southwest Airlines customers resting on Thursday night received an email that could mean that their summer vacation could be more stressful and more expensive than expected.

Southwest, Boeing's largest operator, is removing the 737 Max from the ground by at least August 5, well past the peak of the peak summer season.

Company President Tom Nealon wrote in his email that the airline was removing Max from his program two months longer than planned to reduce the need for last-minute changes during the summer season. The decision, he writes, would make the calendar more reliable.

Other airlines will likely follow the example of Southwest, pressuring Boeing to finish repairing the software on an anti-stall system involved in two fatal crashes.

Last month, Boeing and federal officials privately declared that the company would complete its work before the end of March. Instead, he was delayed by an unforeseen problem that Boeing has not fully described, and the company now wants to complete its work by the end of April.

Boeing chief executive Dennis Muilenburg said the company's pilots had completed 96 test flights totaling 160 hours with the new software and that they would operate more in the coming weeks to prove that the fix works.

Changes must be submitted to the Federal Aviation Administration for approval. Foreign regulators, including those in Europe and China, will then conduct their own examinations, which is important as foreign airlines account for around 85% of Max's orders, analysts at the financial services company said. Cowen.

It remains unclear whether the passengers are willing to board the Max after the accidents in Indonesia and Ethiopia that killed the 346 passengers on board.

"The general public seems to be asking more questions about the aircraft than in the past," said Noah Poponak, analyst at Goldman Sachs, referring to the grounding of the Boeing 787s in 2013 due to overheating of lithium batteries -ion. The 787 survived and became a hit with airlines and passengers.

FAA officials, including Acting Chief Daniel Elwell, met in Washington with representatives of Southwest, American and United and their pilot unions. An FAA spokesperson said he had seen the first results of the two accident investigations, upcoming changes to the Max software, and pilot training on these changes. Elwell promised that the agency would be transparent about the decision to allow the plane to fly.

Dennis Tajer, a pilot with American Airlines 737, who attended the meeting, said the unions were calling for a stronger driver training program, including troubleshooting only indirectly related to anti-stall software. He said the FAA seemed receptive.

"It will not be a minimum training event to win," he said.

The longer Max aircraft sit on the ground, the more airlines lose money. Southwest already estimates that the first three weeks of Max have been blocked, as well as other setbacks, which reduced the airline's revenue by $ 150 million in the first quarter.

Southwest cancels about 90 flights a day because its 34 Max jets have been on the ground since mid-March. Spokesperson, Chris Mainz, said the new schedule eliminates about 160 daily flights to guarantee customers that he will ensure booked flights.

That's 4% of the 4,000 daily Southwest flights in the summer. Nevertheless, unless the airline quickly finds replacement planes – which can be complicated – Southwest will eliminate approximately 10,000 flights that could have carried nearly 1.8 million people from here early August.

American Airlines does not expect its 24 Max jets to fly before June 5th and cancels about 90 flights a day.

United Airlines, with 14 Max planes, says that it mixes its fleet and mainly covers flights scheduled for the Max.

Without these planes, travelers will have fewer choices of flights and fewer planes to transport passengers whose flights are canceled for other reasons, such as bad weather. There could also be fewer ticket sales.

"Travelers who have not yet booked their summer bookings may end up paying slightly higher plane tickets," said Henry Harteveldt, Travel Industry Analyst. at Atmosphere Research Group, "but it will not be hell".

Harteveldt said it expects airlines that do not have Max Jets – a list including Delta, JetBlue, Alaska and Spirit – will be courting travelers with price cuts.

The cost of the Boeing Max Crisis is also increasing as the aircraft remains on the ground and jets emerging from the assembly line are proliferating around Seattle.

With aircraft orders in full swing, Boeing's shares have skyrocketed for more than two years, although they have dropped about 14% between March 1 and Friday's close. . Most of Wall Street has expressed confidence that Boeing can repair the Max quickly and regain momentum.

Goldman Sachs analyst Poponak, however, said Boeing's orders were likely to be affected over the next few years. He added that some airlines seemed to consider Airbus' competitor, the A320neo series, to be superior, and that some aircraft leasing companies were facing the challenge of placing the Max among its customers.

Since its launch in 2017, the Max has become Boeing's best-selling jet. Less than 400 have been delivered, but around 4,600 are on order.

However, the company did not receive any new orders for the Max in March, not even before the March 10 accident in Ethiopia, and only 10 during the first three months of the year, against 112 at the same time last year. It is possible that the airlines interested in the plane have already placed orders.

Boeing stopped deliveries and announced last week that it was cutting production by 737 units from 52 to 42 per month.

Chinese and Norwegian airlines have said they want compensation for their immobilized aircraft. While other airlines have been silent, analysts expect Boeing to make concessions of up to hundreds of millions of dollars.

The Chicago-based company is also facing a growing number of lawsuits filed by the families of the victims of the crash.

Boeing has not provided figures on the financial impact of the Max crisis.

(Copyright 2019 The Associated Press Inc. All rights reserved This document may not be published, disseminated, rewritten or redistributed.)

Source link