Grounding of 737 Max to cost dearly to American, South West Airlines

Clay Curtis
November 10, 2019

Though Boeing is expecting to get approval for flying the jets by end of this year FAA says that there is no timetable for approval for these planes to fly again. "When it does, we will be ready", Parker said at the Baird Industrial Conference. Depending on how long it takes to satisfy FAA and EASA, it could push back a certification flight test and regulators' final decision on lifting the flight ban by a few days or even weeks, said the person.

Regulators overseeing changes on Boeing Co.'s 737 Max rejected an audit of how the software was being developed, prompting the company to make revisions and possibly slowing the return of the jetliner to service, said a person familiar with the action. Airlines say they will need another one to two months after that to train pilots on the changes.

American is already selling flights on five of its Max jets as early as January 15.

The world's largest plane manufacturer had submitted documentation in a vital part of an approval procedure, already postponed by months, for a 737 MAX software improve in the wake of two accidents in Indonesia and Ethiopia that killed 346 people. Southwest Airlines is being more conservative, keeping the Max out of its schedule until February 8. American had 24 Maxes when they were grounded in March and had expected to receive about a dozen more by this time.

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With the planes idled, American canceled almost 10,000 flights in the third quarter alone.

American has estimated that the grounding of its MAX fleet has impacted 2019 earnings by $540 million, a cost Parker reiterated on Wednesday he believes should be borne by Boeing's shareholders rather than American's shareholders.

US and European regulators have asked Boeing Co to revise documentation on its proposed 737 MAX software fix, the planemaker confirmed Wednesday, further complicating its efforts to return the jet to service by year-end.

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