Did Boeing Build Too Many 737 MAX Aircraft?

Boeing’s CEO, David Calhoun, has affirmed his confidence in the beleaguered 737 MAX aircraft. In an interview with…

Did Boeing Build Too Many 737 MAX Aircraft?

Boeing’s CEO, David Calhoun, has affirmed his confidence in the beleaguered 737 MAX aircraft. In an interview with FOX News yesterday, he assured that production would restart this month, albeit at a reduced rate. But, with hundreds of aircraft parked around Boeing’s facilities and airlines not in a hurry to take new planes, you have to wonder whether Boeing already built too many MAX jets.

With aircraft piling up at storage facilities and Boeing planning to restart production in May, has the company built too many MAX aircraft? Photo: Getty Images

Production will restart in May

The beleaguered Boeing 737 MAX has been clogging up car parks and unused taxiways around Boeing’s facilities for over a year now. Despite the type being grounded after two fatal accidents in March last year, the company continued churning out the jets at an astounding rate, optimistic that re-certification would happen in a reasonable time.

At one point, the aircraft were being produced at a rate of 52 per month, although Boeing cut that a few months into the grounding to 10 less, 42 per month. Prior to the problems with the type, Boeing had projected upping production to as many as 57 in 2019, although that has clearly gone out of the window now.

Despite the planemaker halting production on the 737 MAX in December, it is still left with around 500 parked at its facilities, all of which need to be delivered to customers once the grounding is lifted. Despite this, Boeing is confident it will restart production of these planes this month, with CEO David Calhoun telling FOX News yesterday,

“The certification process that we have been going through with the FAA… it has been constructive; it has been thorough, the documentation effort has been significant. Probably it’s taken us longer than we imagined it would have, and the virtual nature of the work now that we have to go through with the FAA adds a little time element to that.

“However, the airplane is in good shape. The demand curve is going to move out a little bit for sure with the virus, but I’m confident those airplanes will move out, I’m confident we will start our line this month on the MAX.”

737 MAX production
Hundreds of MAX have been built and are now waiting to be delivered to customers. Photo: Getty Images

The issue now is whether Boeing’s customers will actually want the MAX, given the current crisis in aviation, and whether they’ve already built too many for the downturned market.

Too many MAX?

FOX News asked Calhoun whether he felt Boeing had produced too many aircraft. Given the situation around Everett and other Boeing facilities, with hundreds of parked MAX awaiting delivery, there’s really only one way to answer that question.

“Did we build too many? Well, of course, in retrospect, we’d all say yes, but on the other hand, that just means we’re going to build less going forward until we deplete that inventory. And we have announced the adjustments that we plan to take with respect to production levels, so our MAX line, along with all of our lines, are going to decrease fairly significantly.”

Boeing 737 MAX car park
Boeing employees have lost car parking spaces to the grounded 737 MAX. Photo: Getty Images

Indeed, as a result of the coronavirus crisis, Boeing has already laid plans to cut the production rate of a number of its product lines. Following a first quarter loss of $641m, Boeing announced reductions in all its commercial aircraft programs, including the 777X and the Dreamliner.

The airframer hasn’t been specific on the production rate of the 737 MAX, although it has indicated to supplier Spirit Aerosystems that it will require 90 fewer fuselages than the 216 previously requested. Boeing has said that it will look to ‘ramp up’ 737 MAX production in 2021 to 31 per month, far less than the 57 it was hoping to have gotten to this year.

With any downturn in production rates, there’s going to be a knock-on effect for employment levels, both in Boeing itself and its suppliers. Calhoun said how he ‘hated’ to have to do this, commenting,

“We told our supply chain want to expect over the next several years and we’ve announced and began to make the adjustment with respect to our footprint and, of course, our employment levels. We hate having to take these actions, but we did have to take them because that’s the market we’re going to see on the other end of this.”

Boeing spirit Aerosystems 737MAX getty images
The cut in production reverberates through Boeing and its suppliers. Photo: Getty Images

Still confident in the plane

Despite the obvious negative attention the 737 MAX has caused Boeing and the mess it’s left for Calhoun to clear up, the CEO was effusive about his feelings towards the model. He said,

There is no question that the MAX problem, the accidents, they set us back for roughly two years if you think about it. My confidence in the MAX, my confidence in the airplane itself, and the safety of the airplane is significant. I mean, I’ve always believed in the MAX; I still believe in it.”

While Calhoun seems to have the utmost support for Boeing’s bread-and-butter narrowbody jet, it remains to be seen whether the flying public will feel the same.

Source : Simple Flying More   

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airBaltic Secures €250 Million From Latvian Government

This week, airBaltic announced that it will receive a €250 million ($274 million) investment from the Latvian government.…

airBaltic Secures €250 Million From Latvian Government

This week, airBaltic announced that it will receive a €250 million ($274 million) investment from the Latvian government. The country’s cabinet approved the move in a bid to help its flag carrier overcome the financial impact of the global health crisis.

airBaltic is glad to receive funding to help it execute expansion plans over the next three years. Photo: airBaltic

An existing relationship

The government of Latvia is the majority shareholder of the airline. Therefore, it is taking steps to ensure its stability through the outbreak. According to a press release, its stake in the firm will increase from 80.05 percent to 91 percent with the deal.

If the European Commission approves the plan, the investment will be provided in tranches. Each portion will be given in line with market rules and will not exceed the losses caused due to impact of coronavirus.

Plans for growth

airBaltic CEO Martin Gauss spoke of the funding that his company is receiving. He clarified that the money would be used to help the airline implement a new strategy after the pandemic slows down.

“With this new equity investment, we can begin to execute our new business plan Destination 2025 CLEAN, which focuses on a new start for airBaltic once international flights resume,” Gauss said, according to the release.

“This will facilitate successful growth for the company once the impact of the COVID-19 crisis begins to ease.”

The airline’s executives have a plan to fill up empty seats after the global climate improves. Photo: Getty Images

The carrier connects the Baltic region with over 55 destinations in Europe, the Middle East, and the Commonwealth of Independent States. The new plan will see airBaltic operate a reduced fleet for a few years. It will initially conduct services with its 22 Airbus A220-300 aircraft. After that, once there is a need for an increase in capacity, it hopes to fly with up to 50 A220-300s by the end of 2023.

While the majority of the operator’s services have been suspended, it has been conducting vital cargo flights with its A220s. Last month, it flew between the Latvian capital of Riga and Urumqi in China to ship crucial medical supplies for use in Latvia.

A fresh approach

Altogether, the airline is confident in its ability to conduct efficient operations when the dust settles. Rather than deferring or canceling its order for A220s, it is relying on them for a swift post-coronavirus expansion.

Unlike the A220s, airBaltic’s 12 DHC Dash-8s and three Boeing 737s are not going to return to action. Therefore, its flights are going to be entirely performed by the Airbus narrowbody.

airBaltic Dash-8
airBaltic’s DHC Dash-8 planes are making way for a fleet of only Airbus A220 aircraft. Photo: Getty Images

Simple Flying reached out to airBaltic for comment on its government support but did not hear back before publication. We will update the article with any further announcements.

What are your thoughts on the support that airBaltic is receiving? Will this be enough to tide it over? Let us know what you think of the situation in the comment section.

Source : Simple Flying More   

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