Boeing to Pause Production of 737 MAX?

Boeing has admitted to the US Securities and Exchange Commission (SEC) that the additional regulatory requirements imposed to ensure safe operations of the aircraft could cause customers to cancel or defer orders, which ‘could also cause us to reduce or temporarily cease 737-MAX production.’

The manufacturer has taken orders for about 5000 examples but due to the grounding, can’t deliver them to customers resulting in them being parked both at the plant near Seattle and at other locations.

‘No Parking Problem’ for Boeing ©CNN

Boeing have said in the past that it expected to commence deliveries in mid-December, but the Federal Aviation Authority (FAA) does not expect to complete its revision of revised training requirements until January next year. Some analysts believe that the return could be much later and operators due to receive the aircraft have been cancelling flights as far as next (northern) summer schedules.

Given the blow to its reputation from the twin fatal crashes of the 737, the FAA is no doubt keen to re-establish its credentials. A vote of no confidence in the FAA was cast by both European and Canadian authorities earlier this year when it announced that they themselves would conduct approvals independently from the FAA.

Boeing has said that it did not expect orders cancelled as a result of the delays to have a significant effect on its revenues but has already cut production by 10 to 42 per month. It’s estimated that the cost of non-delivery, including compensation to airlines affected are as much as $9.2 billion.

Losses for 737-MAX Grounding Cost Southwest $435m ©Mark Ralston/AFP/Getty

Airbus is having problems of a different kind. Its original objective of 880 deliveries of the A321 Neo in 2019  has been revised down to 860 as a result of difficulties with the new flexible cabin. The European manufacturer must deliver 135 in December; this exceeds its previous record for the month-127- by 6%.

Nevertheless Airbus is wildly out-performing Boeing this year; net orders for the first nine months were 718 vs 45.

Rumours that Airbus is ordering Möet versus Boeing’s Coors Light for the end of year party are not confirmed.