Boeing in talks to reimburse airlines over MAX 8 fiasco

Aviation

Boeing CEO Dennis Muilenburg said that the aircraft manufacturer is having “ongoing conversations” with airlines about possible reimbursements following the worldwide grounding of 737 MAX jets, China Daily reported.

The airlines haven’t disclosed how much they are seeking from Boeing, but some analysts peg industrywide losses at about $1 billion. In an interview with Axios, Muilenburg didn’t say how Boeing would compensate airlines, but it could be cash, a discount on future orders or additional pilot training and services.

Airlines seeking compensation include Air China, China Eastern Airlines, China Southern Airlines, Norwegian Air, Turkish Air, Ryanair, Flydubai and United Airlines, the report said.

“Reimbursement isn’t a technical problem,” John Cochran, president of Eaglemark, an aviation consulting firm and professor emeritus of Aerospace Engineering at Auburn University, told China Daily. “It’s a matter of first impression. Some of what Boeing proposes to do may be contractual and it’s certainly sound public relations. Boeing wants to keep its customers happy.”

The 10,000-member pilots union for Southwest Airlines said this month it will ask Boeing for compensation to cover legal costs and lost income for pilots due to the 737 MAX grounding.

The union hasn’t said how much pilots have lost, but it could be as much as $9 million a month, the Dallas Morning News reported.

Southwest has 34 MAX jets in its fleet. The airline said it plans to resume MAX flights on Sept 2, but the union said “there is no accurate estimate of when the MAX will return to service.”

Airlines have used other planes when possible to replace grounded MAX jets, but some flights have been canceled. The airlines apparently seek compensation for lost revenue as well as storage and the cost of preparing the MAX to return to commercial service when the US Federal Aviation Administration and other regulators say it’s safe to fly, the report said.

Boeing MAX jets were grounded worldwide following crashes March 10 in Ethiopia and October 29, 2018, in Indonesia that killed a total of 346 passengers and crew.

Preliminary investigations suggest the aircraft’s Maneuvering Characteristics Augmentation System (MCAS), an automated anti-stall device, apparently forced the noses of Lion Air and Ethiopian Airlines flights down and into a fatal plunge when it erroneously determined the planes were about to stall.

Meanwhile, yet another setback for Boeing — Canada’s Global News reported that Certification experts with Transport Canada know of an ‘unacceptable failure’ in the updated flight control computer on the Boeing 737 MAX 8, and they’re looking into how this will affect the ministry’s ‘ongoing validation efforts.’

The statement came one day after reports emerged that the FAA had found a new risk in the grounded planes that has to be addressed before they can fly again.