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Boeing 737 MAX may return to skies in Q3

Muzaffar Rizvi/Dubai
Filed on May 28, 2020 | Last updated on May 28, 2020 at 09.58 pm
Boeing says the 737 programme began building aeroplanes at a low rate at its Renton, Washington factory.

(Reuters file)

Steps taken to help drive goal of '100% quality for customers while supporting commitment to workplace safety'

With Boeing resuming production of the 737 MAX, airlines across the globe are expected to receive delivery of pending orders by year-end after regulators give the clearance for the aircraft in third quarter, Khaleej Times has learnt.

The century-old manufacturer said the 737 programme began building aeroplanes at a low rate at its Renton, Washington factory, as it implements more than a dozen initiatives focused on enhancing workplace safety and product quality.

"We've been on a continuous journey to evolve our production system and make it even stronger. These initiatives are the next step in creating the optimal build environment for the 737 MAX," said Walt Odisho, vice-president and general manager of the 737 programme.

The struggling aircraft, which was grounded following two deadly crashes, hasn't flown commercially since March 2019 and is still a number of key steps away from being cleared for service by the US Federal Aviation Administration and other regulators.

"The steps we've taken in the factory will help drive our goal of 100 per cent quality for our customers while supporting our ongoing commitment to workplace safety," said Scott Stocker, vice-president of 737 manufacturing.

Flydubai major beneficiary

Aviation sources said flydubai, which placed an order for 175 737 MAX aeroplanes with an option for 50 more worth $27 billion at the 2017 Dubai Airshow, will be among the first batch of airlines that will be receiving the aircraft when deliveries start.

The Dubai-based low-cost carrier forced to take aircraft on lease during a busy travel period as a result of the grounding of its 14 MAX jets since last year. It had cancelled about 19 per cent of its scheduled flights due to this.

"The aircraft will not rejoin the operating schedule until regulatory approval has been received from the General Civil Aviation Authority and the regulatory authorities in the jurisdictions where the airline flies," according to a flydubai spokesperson.

The US aerospace giant had shut production in January this year amid uncertainty over when regulators would clear the jet to fly again.

During the temporary suspension of production, mechanics and engineers collaborated to refine and standardise work packages in each position of the factory. New kitting processes will also ensure that employees have everything they need at their fingertips to build the aeroplane.

According to sources, Boeing may resume 737 MAX deliveries in the third quarter following regulatory approvals before gradually increasing production to 31 per month during 2021.

"The 737 programme will gradually ramp up production this year," according to the Boeing statement on Thursday.

Re-certification is important

The MAX crisis had cost Boeing billions of dollars in compensation for airlines and production expenses, including the cost to store more than 400 planes that could not be delivered to customers.

Despite cancellation of some orders, the 737 MAX programme continues to have a strong order backlog of more than 4,400 aeroplanes.

In April, Boeing recorded zero orders for the second time this year and customers cancelled another 108 orders for the 737 MAX, compounding its worst start to a year since 1962.

The company raised $25 billion in a bond offering that allowed it to avoid taking government aid.

Saj Ahmad, chief analyst at London's StrategicAero Research, said restarting 737 MAX production is a key to assisting suppliers in the programme that would otherwise suffer severe financial issues.

"Boeing cannot afford a major supplier to collapse, because the work on any aeroplane is highly specialised and it's not easy if someone else can step in at short notice and replace another vendor," he told Khaleej Times.

Critically, getting the 737 MAX re-certified is key - not just so that it allows deliveries to recommence and, by extension, revenue comes back into Boeing's coffers, he said.

To a question, he said the final recertification flight had been planned for this spring.

"But with Covid-19 crisis devastating the global economy and absolutely destroying air travel, it's likely that final approval will come late in the third quarter of this year, paving the way for some initial deliveries to commence by the end of the year," Ahmad added.

"Key operators like flydubai will no doubt be chalking off each day on their calendar until clearance is given for the 737 MAX family to get back into the skies again. The 737 family has been a pivotal backbone for their operations and also forms the basis of their future expansion strategy too," he added.

Earlier on Tuesday, Boeing released details on a downsizing plan to cut total headcount by 10 per cent, or roughly 16,000 employees in all by the end of this year.

The company said it approved 5,520 US employees for voluntary layoffs and was notifying another 6,770 staff members that they would be involuntarily let go.

Boeing shares closed up 3.3 per cent at $149.52, then rose another 4.6 per cent to $155.84 after hours on news of the MAX production restart.

- muzaffarrizvi@khaleejtimes.com


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