Plus   Neg

A Lifeline For Boeing 737 MAX?

boeing 737 111919 lt

It took two fatal crashes to ground this high-flier and throw a damper on its growth plans. Yes, It's shares of Boeing (BA) we are talking about. The stock is currently 17% off its all-time high of $446, hit by the woes surrounding its 737 MAX jetliners, which led to the grounding of these planes worldwide, since mid-March.

Boeing is desperately trying to get the regulators endorse the software fix for its flight-control system, which was implicated in both these deadly accidents that killed a total of 346 people. Boeing has ever since been under attack for its bad design. The Federal Aviation Administration also took a some flak for certifying these planes in 2017.

The natural corollary was that rival Airbus would gain ground, capitalizing on the agony of its close competitor. However, Airbus has its own "manufacturing delay" constraints to deal with and things did not really take off for the European plane-maker, as expected.In fact, Airbus cut its 2019 delivery expectations to around 860 planes, from an original target of 880 to 890.

Breaking the dismal sentiment surrounding the 737 MAX, Leisure airline SunExpress ordered 10 additional 737 Max jetliners, worth $1.2 billion at list prices, before routine discounts, yesterday, adding to a previous order of 32 737 MAX planes. SunExpress is a joint venture of Lufthansa and Turkish Airlines, catering to European destinations and tourist spots around the Mediterranean and Black Sea.

"We have full confidence that Boeing will deliver us a safe, reliable, and efficient aircraft," said SunExpress CEO Jens Bischof. "However, it goes without saying that this requires the undisputed airworthiness of the model, granted by all relevant authorities. Our utmost priority at SunExpress is and has always been safety."

The vote of confidence was reinforced by Kazakhstan flag carrier Air Astana, which announced Tuesday the signing of a letter of intent to order 30 Boeing 737 MAX at a list price value of $3.6 billion. The order would serve its new low-cost subsidiary FlyArystan,launched in May this year. Air Astana is a joint venture between the National Welfare Fund of Kazakhstan and BAE Systems.

Peter Foster, President and CEO of Air Astana, said, "Air Astana has had a strong relationship with Boeing ever since the airline started flying in 2002 with a pair of 737NGs. Today we operate both 757s and 767s and we believe that the MAX will provide a solid platform for the growth of FlyArystan throughout our region, once the aircraft has successfully returned to service".

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT