By Andrew Atkinson LEADER EXCLUSIVE
Boeing is considering whether to cut or halt production of its grounded 737 Max after the Federal Aviation Administration said it would not approve the plane’s return to service before 2020.
The US planemaker’s board is holding meetings in Chicago, and the company could make an announcement on production plans soon.
It was reported the board is considering a proposal from top management to temporarily shut down 737 production.
A brief on the matter told of a temporary shutdown being more likely, than another cut.
Boeing said in a statement that the company will continue to assess production decisions, based on the timing and conditions of return to service, which will be based on regulatory approvals and may vary by jurisdiction.
Boeing said if it did not receive approval to begin deliveries before the end of the year it could be forced to further slow production – or temporarily shut down the Max production line – a move that would have repercussions across its global supply chain.
The Boeing plane has been grounded since March 2019 after two fatal crashes in Indonesia and Ethiopia, that killed 346 people.
Boeing has abandoned its goal of winning approval in December to unground the 737 Max, after its chief executive, Dennis Muilenburg, met FAA administrator Steve Dickson. Dickson reportedly said he would not clear the plane to fly before 2020 – and disclosed the agency had an ongoing investigation into 737 production issues in Renton, Washington.
Dickson said there were nearly a dozen milestones that must be completed – before the Max returns to service.
Approval is not likely until at least February, and could be delayed until March, US officials said.
Dickson told Muilenburg – according to an email sent to lawmakers by the FAA – that Boeing’s focus should be on the quality and timeliness of data submittals for FAA review and that FAA’s certification requirements must be 100% complete before return to service.
Boeing had said in November it expected the FAA would allow it to resume 737 Max deliveries in December.
American Airlines said it was extending cancellations of 737 Max flights until April 6.
The FAA told congressional staff in an email, Dickson was concerned that Boeing continues to pursue a return-to-service schedule that is not realistic.
In November Ryanair warned there was a real risk it will have no Boeing 737 Max planes flying in the 2020 summer – due to further delays to the delivery of the grounded aircraft.
Europe’s biggest carrier Ryanair, who reportedly plans to cut bases and pilot and cabin crew jobs, had said it expected to receive its first 737 Max planes in March or April 2020, two months later than expected.
Ryanair’s chief executive, Michael O’Leary, said: “We have reduced our expectation of 30 Max aircraft being delivered to us in advance of peak summer 2020, down to 20 aircraft, and there is a real risk of none.
“We have already reduced our passenger growth forecast. And we may have to cut that again.”
Ryanair reiterated that this would more than halve its passenger growth rate next summer, to 3% from 7%, with the airline carrying 157m passengers, per annum, from the 162 million previously planned.
US carriers, which are the main operators of the 737 Max, targeted early 2020 to get their planes back in the sky. Regulators on either side of the Atlantic are preparing final tests to approve Boeing’s fix for the 737 Max’s controversial MCAS anti-stall system, widely blamed for the two crashes.
The European Union Aviation Safety Agency had previously said the plane was likely to return to service in Europe during the first quarter of 2020.
Congressional hearings in Washington have put Boeing under further scrutiny, with senators reportedly accusing the manufacturer of putting profit before safety.
All three US airlines that operate the 737 Max – Southwest, United and American had reportedly planned to hold hundreds of demonstration flights to reassure passengers that the model is safe to fly.
A planned public relations drive will involve 737 Max flights taking off without passengers – carrying senior airline executives.
Ryanair boss O’Leary described the 737 Max as a game changer aircraft for the airline, able to carry more passengers, while burning less fuel than the existing 737-800s it operates.
*British Airways’ owner, IAG, has agreed to buy Spain’s Air Europa for €1bn to expand routes to Latin America and the Caribbean.
The airline operates domestic and international flights to 69 destinations, with a fleet of 66 aircraft.
O’Leary reportedly said Ryanair would ask competition authorities to force IAG to give up some slots or routes, before approving the takeover.
“It is a merger to monopoly in Madrid and I think we would certainly be looking for the competition authorities to require some competition divestments, particularly in the Air Europa short haul,” said O’Leary, who supported consolidation in principle. Several airlines have gone out of business in the last year, with other airlines taken over, including British regional carrier Flybe, which was acquired by a consortium led by Virgin Atlantic.
Ryanair reported a profit after tax of €1.15bn for the six months to September 30, its most profitable part of the year.
