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Boeing scraps 2019 financial forecast, halts share buybacks in wake of 737 MAX disaster

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World’s biggest aerospace corporation was forced to pull its full financial forecast for the current year due to unresolved issues surrounding Boeing’s once best-selling 737 MAX aircraft.

Boeing also announced plans to pause share buybacks, citing “a challenging time for our customers, stakeholders and the company.”

“Across the company, we are focused on safety, returning the 737 MAX to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public,” Boeing Chairman and CEO Dennis Muilenburg said in a statement.

The manufacturer had previously posted a report on the first-quarter earnings that managed to fall in line with analysts’ expectations, while its revenue was slightly less than projected. Boeing’s earning per share totaled the expected $3.16 from January through March, while the revenue amounted to $22.92 billion against $22.98 billion forecasted by London-based provider of financial markets data Refinitiv.

Boeing stressed that the previous guidance didn’t reflect the impact of two crashes of the company’s flagship planes, leading to the grounding of all 737 MAX 8 jets by global regulators, lawsuits from some air carriers and a decline in market value.

According to the producer, more than 135 test and production flights of updated software for the 737 MAX have been carried out so far.

Boeing’s bestseller crashed on March 10 not far from the Ethiopian capital of Addis Ababa six minutes after takeoff on the way to Nairobi, Kenya. The tragedy, which killed 157 people, marked the second crash involving the same jet model in less than six months. In October, the same type of aircraft, operated by Indonesia’s Lion Air, crashed in the Java Sea shortly after takeoff, claiming the lives of 189 people.

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28 killed in Portugal bus crash, many German tourists

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A bus reported to be carrying tourists, including many from Germany, crashed on the island of Madeira in Portugal, killing at least 28.

Filipe Sousa, the mayor of Santa Cruz, said that 17 women and 11 men were killed in Wednesday’s accident.

Several others were wounded after the vehicle overturned near the town of Canico.

The cause of the crash, which happened in daylight in the early evening, was not immediately clear.

Images on Portuguese media showed an overturned white bus surrounded by firefighters. SIC television said there were 19 ambulances at the scene.

“I have no words to describe what happened. I cannot face the suffering of these people,” Sousa told SIC television.

Portugal’s President Marcelo Rebelo de Sousa said he would travel to Madeira overnight.

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India’s Jet Airways halts all international and domestic operations

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One of India’s major airlines, Jet Airways, has announced it is temporarily halting flight operations on Wednesday after the carrier failed to secure the “critical interim funding” necessary for the company to remain afloat.

Jet Airways will operate the last flight on Wednesday as it cancels all its international and domestic flights, the airline said in a statement. It explained that it cannot afford to pay for fuel or other critical services to keep the operations going, as all its months-long attempts to seek both interim and long-term funding were in vain.

“Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations,” the statement reads.

Earlier this month, the airline’s fleet was significantly reduced to just five aircraft and it was forced to suspend international operations. On Wednesday, the Jet Airways website listed only 37 domestic flights and had an additional nine-page list of canceled flights, saying that the schedule was impacted by “operational reasons.”

The troubled company failed to receive a stop-gap loan of about $217 million from its lenders as part of a rescue deal agreed in late March, Reuters earlier reported.

“Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” an unnamed bank source in the negotiations on the debt resolution process told the agency.

The uncertainty over the crucial funding crashed Jet Airways stock on Tuesday, with shares plunging around 20 percent.

Employees have been hit hardest by the crisis in the company and have reportedly not been paid in months. The pilots even called on the State Bank of India (SBI) to release the necessary funds and appealed to India’s Prime Minister Narendra Modi to save 20,000 jobs which may be lost in the shutdown.

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Xtra Aerospace in Florida also responsible for Boeing 737 Max crash?

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Our purpose is to ensure each flight is safe and cost-effective every day. This is the message on the Xtra Aerospace website. The Xtra Aerospace states their maintenance division can provide optimal maintenance to all of the unique aviation needs.

Xtra Aerospace may have been very much off on this goal when in Indonesia a Lion Air Boeing 737 MAX crashed after it was repaired in a U.S. aircraft maintenance facility and the so-called angle-of-attack sensor was replaced. This sensor sent erroneous signals causing repeated nose-down movements on the Oct. 29 flight that pilots struggled with until the Boeing Max plunged into the Java Sea. Everyone on board, 189 people were killed.

XTRA Aerospace is an FAA/EASA/ANAC certified repair station located in Miramar, Florida, USA.

Documents obtained by Bloomberg News show the repair station, XTRA Aerospace Inc. in Miramar, Fla., had worked on the sensor. It was later installed on the Lion Air plane on Oct. 28 in Bali, after pilots had reported problems with instruments displaying speed and altitude. There’s no indication the Florida shop did maintenance on the Ethiopian jet’s device, according to Bloomberg.

Xtra Aerospace states: ” We specialize in the repair of instruments, radio & mechanical/electrical accessories. XTRA offers extensive capabilities servicing the A300, A320 family/A330/A340 and Boeing 737 thru 777. We are proud to serve the world’s top airlines and suppliers with one goal… complete customer satisfaction.

XTRA Aerospace welcomes the U.S. Government. XTRA is DD2345 certified to obtain military critical technical data. XTRA’s cage code is 5FWE2 and we look forward to helping you with all your sourcing and repair needs.”

U.S. teams assisting the Indonesian investigation reviewed the work by the company to ensure that there weren’t additional angle-of-attack sensors in the supply chain with defects, said a person familiar with the work. They didn’t find any evidence of systemic issues on other sensors the company may have worked on.

Bloomberg states in their article:

“Much of the concern by regulators and lawmakers after the Lion Air and Ethiopian Airlines crashes has focused on Boeing’s design of the Maneuvering Characteristics Augmentation System, or MCAS, which was programmed to push down a plane’s nose to help prevent aerodynamic stalls in some situations. But the preliminary report by Indonesia on the Lion Air crash shows that maintenance and pilot actions are also being reviewed.

It’s common for licensed repair stations to overhaul older parts so they can be resold, said John Goglia, a former member of the NTSB who earlier worked as an airline mechanic. Airlines can save money buying used parts and U.S. regulations require that the parts meet legal standards, Goglia said.

If the sensor was repaired at XTRA Aerospace, “it would have to go through what the manual says to overhaul it,” he said. “That means all the steps.”

The Indonesian preliminary report doesn’t say what went wrong with the device but indicates that the plane’s maintenance is a subject of the investigation.”

The Ethiopian Airlines 737 Max that crashed on March 10 also apparently had issues with the same type of sensor, which triggered a safety system on the plane that was driving down the plane’s nose, according to people familiar with the accident. In that case, investigators are still attempting to locate one of the sensors to help determine why it malfunctioned.

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Ethiopian Airlines CEO believes in The New Spirit of Africa and pledges to work with Boeing

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Tewolde GebreMariam, Group CEO, Ethiopian Airlines issued a statement today.

He wrote: “It has been more than two weeks since the tragic crash of Ethiopian Airlines flight 302. The heartbreak for the families of the passengers and crew who perished will be lasting. This has forever changed their lives, and we at Ethiopian Airlines will feel the pain forever. I pray that we all continue to find strength in the weeks and months ahead.

The people of Ethiopia feel this very deeply, too. As a state-owned airline and the flagship carrier for our nation, we carry the torch for the Ethiopian brand around the world. In a nation that sometimes is saddled with negative stereotypes, accidents like this affect our sense of pride.

Yet this tragedy won’t define us. We pledge to work with Boeing and our colleagues in all the airlines to make air travel even safer.

As the largest aviation group on the continent of Africa, we represent The New Spirit of Africa and will continue to move forward. We are rated as a 4-star global airline with a high safety record and member of Star Alliance. That will not change.

Full Cooperation

The investigation of the accident is well underway, and we will learn the truth. At this time, I do not want to speculate as to the cause. Many questions on the B-737 MAX airplane remain without answers, and I pledge full and transparent cooperation to discover what went wrong.

As it is well known in our global aviation industry, the differences training between the B-737 NG and the B-737 MAX recommended by Boeing and approved by the U.S. Federal Aviation Administration called for computer-based training, but we went beyond that. After the Lion Air accident in October, our pilots who fly the Boeing 737 Max 8 were fully trained on the service bulletin issued by Boeing and the Emergency Airworthiness Directive issued by the USA FAA. Among the seven Full Flight Simulators that we own and operate, two of them are for B-737 NG and the B-737 MAX. We are the only airline in Africa among the very few in the world with the B-737 MAX full flight Simulator. Contrary to some media reports, our pilots who fly the new model were trained on all appropriate simulators.

The crews were well trained on this aircraft.

Immediately after the crash and owing to the similarity with the Lion Air Accident, we grounded our fleet of Max 8s. Within days, the plane had been grounded around the world. I fully support this. Until we have answers, putting one more life at risk is too much.

Belief in Boeing, U.S. Aviation

Let me be clear: Ethiopian Airlines believes in Boeing. They have been a partner of ours for many years. More than two-thirds of our fleet is Boeing. We were the first African airline to fly the 767, 757, 777-200LR, and we were the second nation in the world (after Japan) to take delivery of the 787 Dreamliner. Less than a month ago, we took delivery of yet another new two 737 cargo planes (a different version from the one that crashed). The plane that crashed was less than five months old.

Despite the tragedy, Boeing and Ethiopian Airlines will continue to be linked well into the future.

We also are proud of our association with U.S. aviation. The general public does not know that Ethiopian Airlines was founded in 1945 with help from Trans World Airlines (TWA). In the early years, our pilots, flight crews, mechanics and managers were actually employees of TWA.

In the 1960s, after the handoff, TWA continued in an advisory capacity, and we’ve continued to use American jets, American jet engines and American technology. Our mechanics are Federal Aviation Administration (FAA) certified.

Our first direct passenger service to the U.S. began in June 1998, and today we fly direct to Africa from Washington, Newark, Chicago and Los Angeles. This summer, we will begin flying from Houston. Our cargo flights connect in Miami, Los Angeles and New York.

U.S. travel to Africa has increased more than 10 percent in the last year, second only to travel to Europe in term of the percentage increase — traveling to Africa has increased more than traveling to Asia, the Middle East, Oceania, South America, Central America or the Caribbean. The future is bright, and Ethiopian Airlines will be here to meet the demand.

In less than a decade, Ethiopian Airlines has tripled the size of its fleet – we now have 113 Boeing, Airbus and Bombardier aircraft flying to 119 international destinations in five continents. We have one of the youngest fleet in the industry; our average fleet age is five years while industry average is 12 years. Moreover, we have tripled the passenger volume, now flying more than 11 million passengers annually.

Each year, our Aviation Academy trains more than 2,000 pilots, flight attendants, maintenance workers and other employees for Ethiopian Airlines and several other African airlines. We are the company others turn to for aviation expertise. In the last 5 years, we have invested more than half a Billion dollars in training and other infrastructure in our Addis Ababa base.

We will work with investigators in Ethiopia, in the U.S. and elsewhere to figure out what went wrong with flight 302.

We resolve to work with Boeing and others to use this tragedy to make the skies safer for the world.”

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