Boeing faced a crisis. After the second plane crash, one of the main hopes of the aircraft company, the Boeing 737 Max 8 airliner, lost customer confidence.
China to forbidden Boeing 737 MAX 8 to flight
Chinese authorities have ordered the suspension of flights of Boeing 737 Max 8 airliners until the causes of the accident in Ethiopia have been ascertained. Following China, this decision was made in Ethiopia itself. The likelihood of such a move is also being discussed in Indonesia, and in South Korea began a large-scale check of Boeing airliners. Boeing shares responded with a 12% drop.
The boycott of one of Boeing’s most promising models?
According to analysts, the boycott of one of the most promising models of Boeing will have a negative impact on the company. The company’s shares in the near future will move down.
The Boeing 737 Max 8 liner is the second version of the narrow-body 737 Max, the operation of which began in 2017. These airliners were supposed to replace the Boeing 737 Next Generation series. However, two consecutive disasters questioned the company’s plans.
On the tenth of March this year in Ethiopia, the Boeing 737 Max 8 liner “Ethiopian Airlines” crashed, which flew from Addis Ababa to Nairobi, the capital of Kenya. The victims of the crash were 157 people. The previous accident occurred on October 29, 2018. Then the Boeing 737 Max 8 airline Lion Air crashed in Indonesia near Jakarta.
Many airlines are flying Boeing 737 MAX
At the moment, many airlines around the world have airliners of this model. China Southern Airlines, a Chinese company, owns 16 737 Max series aircraft and expects delivery of another 34. A major customer is Southwest Airlines, an American – now in its fleet there are 31 737 Max liners. Another major customer is Indonesian Lion Air, which ordered 201 airliners and received so far 14.
China’s hasty decision to suspend flights caused confusion in the industry. The controlling authorities of a large state suspended flights before the authorities of the country that certified this type of aircraft did the same.
Since the decision was made before the American investigators arrived at the crash site, and even before Boeing reported the news to the dispatchers, the Federal Civil Aviation Agency of the United States might have to resolve the issue publicly.
Chinese airlines operate 96 aircraft of this series. The representative of the United States, who wished to remain anonymous, said he did not know on what grounds the Chinese authorities were acting since the investigation into the disaster had just begun. According to him, the United States is not planning to follow the example of China, since information about why the plane fell in Ethiopia is not enough.
A blow to Boeing
The active refusal to operate the Boeing 737 Max will negatively affect both the manufacturer itself and the business of its customers. For the global economy, these liners are literally engines of growth. A series of 737 Max airliners generate almost a third of Boeing’s operating revenue and also forms the backbone of many of the world’s fleets that use these aircraft over short distances. In January, Boeing delivered 350 aircraft of the 737 MAX series and received orders for another 5 thousand from airlines in developing countries. Now, these orders are in question!