It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Monday, December 16, 2019
BOEING NEWS UPDATED
Boeing suspends production of 737 Max model involved in fatal crashes
US air watchdog said last week it would not approve plane’s return to service before 2020 BOEING GOING GOING GONE AND THEY STILL ISSUE A DIVIDEND
Boeing 737 Max aircraft parked on the tarmac at its factory in Renton,
Washington. Photograph: Lindsey Wasson/Reuters
Boeing is temporarily halting production of its grounded 737 Max after the Federal Aviation Administration (FAA) said last week it would not approve the plane’s return to service before 2020.
The decision came after the US planemaker’s board held a regular two-day meeting in Chicago, which started on Sunday.
“Safely returning the 737 Max to service is our top priority,” Boeing said in a statement. “We know that the process of approving the 737 Max’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 Max updates.”
The Max, which was Boeing’s bestselling plane, has been involved in two fatal crashes that claimed 346 lives. More than 700 Max jets are now grounded worldwide. It is the first time in 20 years that Boeing has halted 737 production and the move could have significant repercussions for the US economy.
Boeing is the US’s largest manufacturing exporter and a shutdown would impact suppliers across the country, hitting the country’s already troubled manufacturing sector. The suspension has already led to the cancellation of thousands of flights scheduled by airlines that were awaiting new planes or had bought ones that are now grounded.
The Seattle Times reported on Sunday that the board was considering a proposal from top management to temporarily shut down 737 production in Renton, Washington from January.
Boeing as yet has no timeframe for restarting production but plans to redeploy its 12,000-strong Renton workforce.
Boeing has 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.
On Thursday, Boeing abandoned its goal of winning approval this month to unground the 737 Max after its chief executive, Dennis Muilenburg, met FAA administrator Steve Dickson. Dickson said on Wednesday 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 told Reuters last week.
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. He made clear that FAA’s certification requirements must be 100% complete before return to service.”
Boeing has suspended production of its grounded 737 MAX aircraft, after the Federal Aviation Administration announced that it would not approve the jet’s return to service before 2020.
The temporary shutdown is a move that will affect Boeing’s global supply chain, and is likely to present further complications for airlines who have lost thousands of dollars on missed and cancelled flights.
The announcement came after a congressional hearing on Wednesday, Dec. 11 in which lawmakers urged the FAA to take a harder line with Boeing, whose 737 MAX planes have been grounded worldwide since March, following two fatal crashes in five months that killed 346 people.
The crashes happened within six months of each other. In March, Ethiopian Airlines flight 302 went down, killing 157 people — including 18 Canadians — while Lion Air flight 610 crashed in October, killing 189 people on board.
A Boeing worker walks in view of a 737 MAX jet Dec. 16, 2019,
in Renton, Wash. Elaine Thompson / The Associated Press
Boeing said in an emailed statement Monday that safely returning the 737 MAX to service was its “top priority.”
“We know that the process of approving the 737 MAX’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 MAX updates,” it said, adding that it has around 400 airplanes in storage.
“We believe this decision is least disruptive to maintaining long-term production system and supply chain health.”
FAA Administrator Stephen Dickson said on Wednesday he would not clear the plane to fly before 2020, adding that the agency has an ongoing investigation into 737 production issues in Washington.
Dickson said there are nearly a dozen milestones that must be completed before the MAX returns to service, U.S. officials told Reuters, and approval is not likely until at least February.
“When the 737 MAX is returned to service, it will be because the safety issues have been addressed and pilots have received all of the training they need to safely operate the aircraft,” Dickson said Wednesday.
The FAA came under fire after their analysis revealed it had an official estimate that there could be 15 more fatal MAX crashes over the next few decades if Boeing didn’t fix a critical, automated flight-control system at least five months before the second deadly crash.
Earlier this month, the FAA also proposed a civil penalty of more than $3.9 million against Boeing for installing non-conforming components on approximately 133 aircraft, which Boeing subsequently presented as ready for airworthiness certification.
Analyst says production halt of Boeing 737 MAX could have ‘substantial’ impact on U.S. economy Analyst says production halt of Boeing 737 MAX could have ‘substantial’ impact on U.S. economy
Boeing’s regular two-day board meeting began in Chicago on Sunday. At the time, the company said it could make an announcement on production plans as soon as late Monday.
In July, Boeing reported a $3-billion second-quarter loss after the prolonged grounding of its second plane. By Oct. 25, it released a statement that outlined steps taken to prevent future crashes.
After a lengthy investigation, federal officials found Boeing’s flight-control system — known as a Manoeuvring Characteristics Augmentation System (MCAs) — automatically pushed the noses of the doomed aircraft down in response to faulty sensor readings. In a statement, Boeing said it redesigned the way Angle of Attack (AoA) sensors work with its MCAs.
Going forward, MCAS will compare information from both AoA sensors before activating, adding a new layer of protection, Boeing said.
In addition, the aircraft manufacturer said MCAS will now only turn on if both AoA sensors agree, will only activate once in response to erroneous AOA, and will include an override system. Prior to the crashes, Canadian airlines Air Canada, WestJet and Sunwing Airlines flew 41 planes of the type that crashed in Ethiopia. Air Canada had 24, WestJet flew 13 and Sunwing had four. In October, Air Canada announced that it would keep the Boeing 737 MAX off its flying schedule until Feb. 14, citing “regulatory uncertainty” that will affect thousands of passengers. Will flights be affected? In the “short to medium run,” David Gillen, director of the Centre for Transportation Studies at the University of British Columbia Sauder School of Business, said Canadian travellers won’t notice an increase in flight prices — but it could affect prices in the long run.
FAA chief admits agency made a mistake not taking immediate action to prevent further Boeing 737 MAX crashes FAA chief admits agency made a mistake not taking immediate action to prevent further Boeing 737 MAX crashes
Gillen, who also teaches transportation policy, said that after the initial grounding of the 737 MAX planes, prices soared between 15-20 per cent, where they’ve remained ever since. “The loss of capacity has already being fully capitalized into the fare structure,” said Gillen. He noted that a permanent shutdown was highly unlikely, but would be costly for airliners like Air Canada, whose MAX planes made up about 20 per cent of Air Canada’s narrow-body fleet and would typically carry about 11,000 passengers per day.
“An awful lot of airlines in the world had had planned on putting that particularly aircraft capacity into service,” he said.
“If that capacity is no longer there, it means that they’re going to have to scramble and get capacity from somewhere else.”
If Boeing were to invoke a permanent shutdown, he said another increase in prices would occur.
“Those fares have been increased in anticipation that the 737 capacity would come back online,” said Gillen.
Final report released on Boeing 737 MAX crash in the Java Sea Final report released on Boeing 737 MAX crash in the Java Sea
“If that’s not going to happen over a fairly significant period of time, then we might see an increase in fares in the longer term.”
Helane Becker, an airline analyst with Cowen, said the temporary shutdown could make it difficult for airlines to grow if the 737 MAX isn’t re-certified through mid 2020.
Becker said it will take between two and four months for airlines to put the aircraft back in service once it has been re-certified, which means they could be out of commission through June 2020.
A ground crew walks near a Boeing 737 Max 8 plane operated by Shanghai Airlines parked on the tarmac at Hongqiao airport in Shanghai, China.Image Credit: AFP
Shanghai: Expatriate pilots flying Boeing Co.’s most popular plane for Chinese airlines used to be able to take their pick from dozens of jobs paying $300,000 plus perks thanks to a shortage of experienced aviators there.
The grounding of the 737 Max has changed that.
Chinese carriers have largely stopped hiring foreign pilots for Boeing’s main narrow-bodied jet, nine months after two crashes led to the grounding of the best-selling 737 Max, according to recruitment agencies. Airlines in China’s booming aviation market had been among the most enthusiastic buyers of the plane, accounting for 20% of a global fleet that now sits idle.
Chinese airlines still pay above-market wages but the lengthy grounding has hit a swath of roles paying multiple times the median salary of a commercial pilot in the US.
With no clear timeline for the Max’s reinstatement after two lethal crashes, demand for expat pilots of any 737 variant in China has slowed to a trickle. Only a handful of the country’s airlines are recruiting for such jobs now.
“We’ve seen airlines suspend recruitment of 737 pilots, period,” said Andre Allard, founder and president of AeroPersonnel Global Inc., a Montreal-based pilot-recruitment agency that has worked in China since 2007. “Many of these airlines had the Max on order. That evidently changed their plans.”
China’s growing middle class has put the country on track to be the world’s biggest aviation market in the coming next decade.
For many local airlines, short-haul workhorses like the 737 became the aircraft of choice in the travel frenzy. But China has long struggled to produce enough pilots on its own: By the end of 2016, Chinese carriers had more than 1,000 foreigners in their cockpits, double the number in 2010.
The decline in demand for overseas 737 pilots leaves many of the world’s best-paid flying jobs, which come with a suite of perks such as signing bonuses, education allowances and free flights, to foreign Airbus SE skippers who try their hand in China.
Triple Whammy
Boeing is under intense scrutiny following the two disasters that killed 346 people. In October last year, a Lion Air flight plunged into the sea shortly after taking off from Jakarta, and in March an Ethiopian Airlines jet crashed near Addis Ababa. It’s not just those Max tragedies weighing on the sector. China’s economy is slowing, and the country is locked in a trade war with the US that’s into its second year. As an American aerospace manufacturer, Chicago-based Boeing has found itself in the middle of the dispute.
China was the first major jurisdiction to ground the Max plane, which has been banned from flying since March as Boeing tries to fix a flight-control system implicated in both crashes. The US aviation regulator said in December it won’t complete the aircraft’s required approvals until 2020. Even then, the Max could take months to reach airlines: European low-cost carrier Ryanair Holdings Plc doesn’t expect deliveries before May.
Recruiter Wasinc International says the crisis at Boeing has spread to change the fortunes of aviators in China.
Only seven or eight of the 28 Chinese airlines on Wasinc’s books are actually hiring pilots, said the company’s president, Dave Ross.
“Most of them are overstaffed because of the grounding of the Max,” Ross said by phone from Las Vegas. Just one or two are interested in 737 pilots, he said.
A Boeing spokesman declined to comment on demand for foreign 737 pilots in China. Of the country’s big three carriers, China Eastern Airlines Co. declined to comment, while Air China Ltd. and China Southern Airlines Co. didn’t respond to requests for comment.
Low-cost carrier China United Airlines, a unit of China Eastern, is still in the market for pilots, offering $288,000 a year to 737 captains on three-year contracts, according to Wasinc’s website. But that’s the site’s first ad for 737 pilots in China since July. The package includes a monthly education allowance of $1,000 for children in Chinese schools.
The drought’s unlikely to end until the Max is cleared by regulators and Boeing can resume deliveries. Chinese buyers have received 76 of the jets so far, and are due to receive 181 more, according to data on Boeing’s website.
While there’s less immediate need for 737 pilots in China, appetite for Airbus captains is unabated. “The only airlines hiring without much change are A320 operators,” said Ross.
$311,000 After Tax
For example, Juneyao Airlines in Shanghai is offering $299,000 a year to A320 captainsaged between 30 and 53. The role demands an average of just 14 hours flying a week and includes 50 days of paid leave and an overseas employment allowance of $666 a month, according to Wasinc. The pay climbs to $311,000 “- after tax “- a year in the second term.
The Chinese airlines that are still hiring are getting more picky, said Tony Liu, a self-employed pilot agent based in Guangzhou, northwest of Hong Kong. In particular, they take a dim view of errors during flight assessments, he said.
“If you really want to work here, you have to prepare pretty good,” said Liu. “If you make some mistake in the simulator, they will be very strict.”
China has also sought to lean less on foreigners. The number of Chinese licensed commercial pilots was 61,492 at the end of 2018, according to the Civil Aviation Administration of China. That’s up 54% from 2014 levels, but it’s still not enough. According to Boeing, China will need 8,090 new aeroplanes over the next 20 years, the bulk of them single-aisle aircraft “- a category where Boeing’s 737 competes with Airbus’s A320 family of planes.
To fly them all, China will require another 124,000 pilots, Boeing says. That’s the equivalent of 119 new hires every week for two decades.
All told, it’s still possible for overseas pilots to head home with $1 million in the bank after five years of flying in China, said Allard at AeroPersonnel. It’s just that Airbus captains are more in favour now, he said.
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