Boeing faces doubtful airline chiefs


  • Business
  • Tuesday, 04 Jun 2019

Company in crisis: A 737 Max aircraft is pictured at the Boeing factory in Renton, Washington, US. Airline chiefs said Boeing must convince regulators worldwide of the 737’s safety, not just the US Federal Aviation Administration, if it’s to restore faith in the model. — Reuters

LONDON: After two fatal crashes in five months involving its best-selling 737 Max jet, Boeing Co sent a team to reassure airline bosses of its focus on safety at their annual gathering in Seoul. They faced a tough crowd.

The International Air Transport Association event began on Sunday with an opening ceremony in which sobering news reports on the disasters were beamed onto super-sized screens as the industry group’s head, Alexandre de Juniac, warned that the plane-approval process is damaged and the industry under scrutiny.

Doubts about a speedy resolution to the Max crisis hang over the two-day meeting, aviation’s biggest gathering since the second crash in Ethiopia in March and a key annual forum for top-level discussions.

Airline chiefs said Boeing must convince regulators worldwide of the 737’s safety, not just the US Federal Aviation Administration, if it’s to restore faith in the model.

“Unless they get all regulators on board, irrespective of how good or how well they think they’ve fixed the aircraft, it’s not going to work,” Emirates president Tim Clark said in an interview at the gathering. “It’s done enormous damage to the industry, and they have a responsibility to make that good.”

The Max was grounded worldwide after the crashes in Ethiopia and Indonesia killed a total of 346 people.

The FAA has said there’s no time frame to sign off on Boeing’s proposed software fix for the jet, leaving airlines struggling to plan for an end to the disruption. While India’s SpiceJet Ltd predicts the plane may fly again in July, Emirates reckons it could be December and Singapore Airlines Ltd says it’s impossible to know.

“We’re definitely looking to restore confidence,” Christy Reese, Boeing’s vice president of Asia-Pacific commercial sales and marketing, said in an interview in Seoul.

A spokesman for the Chicago-based planemaker said the company is focused on supporting customers “in every way possible to ensure complete confidence in the 737 MAX and a safe return to commercial flight.”

To compound Boeing’s challenges, another problem emerged on late Sunday. US aviation regulators said airlines worldwide must inspect 312 of the 737 family of aircraft, including some of the grounded 737 Max, because they have wing components that are prone to cracking and must be repaired within 10 days.

Even if the FAA agrees to Boeing’s safety upgrade, the Max’s reach would be limited if other authorities, especially in Europe and China, fail to clear the jet to fly, and Ed Bastian, chief executive officer at giant US carrier Delta Air Lines Inc, led calls for coordinated regulatory action.

Combined approval from officials across the globe affirming that the jet is safe would help restore bruised consumer confidence, Bastian told reporters. Deutsche Lufthansa AG CEO Carsten Spohr echoed the Delta boss’s view. Not everyone is losing patience in Boeing. Panama’s Copa Airlines, which has ordered more than 60 Max jets, said it has no plans to change its purchase.

“I have confidence in what they are going to do,” CEO Pedro Heilbron said in an interview. “We’ve been talking for months. How it’s been fixed, what’s been changed. It’s going to be fine.”

While different regulators are likely to sign off on the Max at different times, the plane will be back in service in a few months, he said.

Whatever the decision by regulators, Korean low-cost carrier Jeju Air said shattered public trust in the Max will take longer to restore.

“That will be Boeing’s role,” Seok Joo Lee, the airline’s CEO, said in an interview.

Thai Airways International Pcl, which is weighing the Max against Airbus SE’s rival A320neo for a fleet deal, echoed those concerns, with Sumeth Damrongchaitham, its outgoing president, saying Boeing will need to convince passengers of the 737’s safety before carriers consider new purchases.

“You cannot buy the aircraft and nobody wants to fly it,” he said. — Bloomberg

--With assistance from Stephen Engle.

To contact the reporters on this story: Benjamin Katz in London at bkatz38@bloomberg.net;Anurag Kotoky in New Delhi at akotoky@bloomberg.net;Sohee Kim in Seoul at skim847@bloomberg.net;Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper

©2019 Bloomberg L.P.

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