Flydubai may stick to $27B 737 MAX order

Dubai - Flydubai is the first airline in the region to take delivery of the brand-new 737 MAX 8 aircraft in 2017

Flydubai has no immediate plans to review its $27 billion order for MAX aircraft following two fatal incidents involving the latest version of US company's best-selling 737 family jet, Khaleej Times has learnt.
Indonesia's Lion Air, which suffered the loss of 189 on board in a deadly crash involving a brand-new aircraft in October last year, plans to drop a $22 billion order for 737 MAX jetliners. Malaysia is also reconsidering the purchase of 25 Boeing 737 MAX 8 aircraft after the second fatal crash in less than five months that claimed the lives of 157 on board the Ethiopian Airline on Sunday.
"The airline will wait for the investigation reports of the two accidents before reviewing its order. It is too early to take a call especially when the Federal Aviation Administration (FAA) of the US informed international airlines that 737 MAX planes remain airworthy," industry sources told Khaleej Times.
Flydubai, the only UAE airline operating the MAX 8 and MAX 9 aircraft, announced a $27 billion order for 225 MAX aircraft in November 2017 to strengthened its fleet and support expansion of its network within a geographic area that is home to 2.5 billion people.
"Flydubai went through a rigorous process to identify the right aircraft that met the requirements of our operations," a spokesperson of flydubai said in a statement to Khaleej Times.
Flydubai is the first airline in the region to take delivery of the brand-new 737 MAX 8 aircraft in 2017 to further optimise fuel efficiency, reduce emissions and make less noise. The 737 MAX is a key revenue driver for Boeing, whose commercial airline business brought in nearly 60 per cent of its more than $100 billion in revenue last year.
"The introduction to our fleet of a new model of aircraft is regulated by the FAA. This is also approved by the relevant authorities and regulators. The aviation sector is highly regulated and flydubai rigorously adheres to all regulations," the statement said.
Saj Ahmad, chief analyst at London-based StrategicAero Research, said flydubai will stick to its record $27 billion 737 MAX aircraft order.
"It is highly unlikely, that despite being the biggest 737 MAX customer in the GCC that flydubai will either cancel or defer orders. The costs would be immense and equally, the airline wouldn't exactly be able to knock on Airbus' door and get new airplanes any faster," he said.
He said the cancellation of order may involve heavy exit penalties and the airline wouldn't be able to get any competing model in enough numbers fast enough to support their expansion. "Further, without knowing what caused this latest accident, flydubai, like many other MAX operators, will not make any knee-jerk reactions," he said. "It will take time to uncover the reasons behind this latest crash involving the 737 MAX, but there is zero indication that there is a manufacturing fault(s) or that the aircraft is not safe to fly.
"At the moment, only two variants of the MAX are in operation - the 737 MAX 8 and the 737 MAX 9. There are well over 320 737 MAXs in service worldwide while more than 5,000 aircraft belong to similar family are on order," he said.
Meanwhile, flydubai grounded its fleet of 11 Boeing 737 MAX 8 and two MAX 9 aircraft in line with the directives of the General Civil Aviation Authority (GCCA).
"Our Boeing 737 MAX 8 and MAX 9 aircraft have been grounded following the directive issued by the GCAA. To minimise disruption to passengers, we will operate flights with our fleet of Next-Generation Boeing 737-800 aircraft," flydubai announced on its Facebook page.
"If you don't hear from us, your flight will be operated to schedule by one of our Next-Generation Boeing 737-800 aircraft," it added.
Saj Ahmad of StrategicAero Research said flydubai's decision to ground its fleet of 737 MAX 8s and 737 MAX 9s is a prudent step while investigators pore over the details from Ethiopian Airlines 737 MAX 8 crash. "Given the flexibility that flydubai has from its extensive 737-800 fleet, the airline will adjust its scheduled routes to replace those sectors served by the 737 MAX until regulators are in agreement that the fleet is good to fly," Ahmad said.
"The diligence in grounding the 737 MAX will allow Boeing, regulators and investigators to understand the Ethiopian Airlines' crash while at the same time, roll out a suite of software enhancements to enhance safety features of the aircraft," he added.
- muzaffarrizvi@khaleejtimes.com