The US genuflected to global pressure and ordered grounding of Boeing 737 Max aircraft only days after insisting that the plane was airworthy despite two crashes in five months.
Canada said it received “new data” on Ethiopian Airlines crash that made them think again and to ground the plane.
The US ban was announced by President Donald Trump saying “ Any plane currently in the air will go to its destination and be grounded upon landing until further notice”.
The US Federal Aviation Administration, the certification authority for the 737 Max said it changed its stance after seeing “new evidence collected at the crash site and together with newly refined satellite data available to FAA this morning”.
According to Boeing they recommending temporary suspension of the entire fleet of 371 Boeing 737 Max aircraft. Boeing’s shares fell further 2.5 per cent after the grounding announcement. This is full blown crisis for Boeing in its rivalry with Airbus in commercial aerospace, single aisle 737’s and A 320s are the low cost work horses for many airlines. TUI’s estimate of the weekly cost of grounding its five Max 8 aircraft is £2.55m (€3m). 41, 000 flights by 34 Max 9s have been grounded by Southwest Airlines. The Norwegian Airlines grounded 18 of its Boeing 737 Max 8.
Last tune grounding a model of aircraft even temporarily was six years ago when Boeing 787’s were stopped from flying for several months while it developed a fix for onboard batteries.
Mr Marc Garneu the Canadian Transport Minister said “ although the data were not conclusive, but marked the first time the two accidents which together killed 346 have been linked publicly by authorities based on evidence gathered from Ethiopian flight”.
Investors have rushed to protect themselves from further falls in Boeing stock, as the grounding of the 737 Max aircraft threatens to cost the group over $1bn.
The 737 Max grounding involves 350 planes at more than 50 operators. “Boeing negotiates with each airline the amount of compensation and often major portion of the compensation is done via future discounts on aircraft, but there will be some airlines who will hold out for cash.
The Boeing 737 Max was emerged out of a threat posed by its European arch-rival, when In 2011 Tom Horton, the then President of American Airlines announced Airbus had won part of multi-billion-dollar contract to supply a replacement for the carrier’ short-haul fleet to supply A320 neo. a new variant of the plane with a more economic engine. To stay in the race Boeing had to scramble and offered American a revamped version of its existing bestseller, the 737 and launched it in 2017.
The reputation of the US regulator, The Federal Aviation Administration is on the line, which in hours after the Ethiopian crash issued a global notice of “continued airworthiness” for the plane, only to be left isolated after China, the first country to ground all 737 Max 8 aircraft, and fifty other countries grounded the aircraft. Feng Zhenglin director and party secretary of the Civil Aviation Administration of China which grounded 96, 737 Max 8 planes, explained its decision the move has been made due to ” Zero tolerance of the civil aviation industry towards safety hazards”. The FAA’s belated response when it finally acted after fresh evidence from the crash scene, however, has amplified the criticism of the FAA;s ability to safeguard the industry amid fears it is understaffed and under funded without a permanent head for over a year. The raising fears that FAA could be too close to the industry and its certification process is also under scrutiny. The MCAS system was classified as a new element, but the 737 Max fleet was classified as a derivative of earlier models, meaning it did not require the same amount of certification. Boeing has been one of the most influential and politically well connected companies in the US going as far back as late 1950s with Democratic Senator Henry Jackson known as the ” senator from Boeing”. When Mr Trump won the presidency, Boeing donated $1 million to his inaugural committee fund, despite that the incoming president castigated Boeing for the high costs of replacing Air Force One, which he said were over $4bn by tweeting ” Cancel order!” in December 2016.
The 737 Max has secured around 5, 000 orders worth billions of dollars and the company has so far delivered 356 of them, including the two that crashed and 29 of the larger Max 9 jets.