Southwest Airlines has 34 Boeing 737 MAX airplanes. American has 24 and United 14. They’re all grounded until further notice.
By Peter Economy The Leadership Guy @bizzwriter
After two of its 737 MAX 8 aircraft crashed — Lion Air Flight 610 on October 29, 2018, and Ethiopian Airlines Flight 302 on March 10, 2019 — killing all aboard, Boeing is in a particularly difficult situation. The 737 MAX is the company’s fastest-selling aircraft, with more than 5,000 sold.
If that wasn’t enough, families of 737 MAX crash victims are increasingly filing lawsuits against Boeing. Two new lawsuits were filed in the U.S. District Court on Wednesday, and many more will surely be filed in the coming weeks.
Says attorney Steve Marks, whose firm is representing families of 20 victims of the Lion Air crash, “There is no question that Boeing is responsible for these accidents, and the only question is the degree of culpability.”
In addition, airline Garuda Indonesia announced today that it sent a letter to Boeing requesting cancellation of its order for 49 Boeing 737 MAX aircraft. According to an airline spokesperson, “Our passengers have lost confidence to fly with the MAX 8.” The deal is valued at approximately $4.9 billion.
It is possible that other cancellations may follow, especially if Boeing can’t quickly solve the problems that caused the two 737 MAX aircraft to crash in the first place.
And Boeing may also be sued by the airlines that are losing money due to their grounded 737 MAX airplanes. In the U.S. alone, the three airlines flying 737 MAX aircraft — Southwest, American, and United — have had to ground a total of 72 airplanes, wreaking havoc on schedules and stranding passengers.
As Boeing CEO Dennis Muilenburg announced on Sunday, the company is working on a fix. In a statement, Muilenburg said,
Boeing is finalizing its development of a previously-announced software update and pilot training revision that will address the MCAS flight control law’s behavior in response to erroneous sensor inputs.
There’s clearly major financial turbulence ahead for Boeing. While a fix to the 737 MAX aircraft should get the planes flying again, the company is going to be in court for years to come. Hopefully Boeing has some very deep pockets — it’s going to need them.
PUBLISHED ON: MAR 22, 2019
