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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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Indonesian national airline Garuda cancels order for 49 Boeing 737 Max 8 jets

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Indonesia’s flag carrier Garuda has announced the cancellation of its multi-billion-dollar order for 49 Boeing 737 Max 8 passenger jets after two fatal crashes involving the aircraft in less than five months.

In 2014, Garuda Indonesia signed a $4.9 billion agreement for the delivery of 50 of the Boeing planes, one of which was handed to the company.

The air carrier has now reportedly sent a letter to Boeing to cancel the order for the remaining 737 MAX jets with the representatives of the world’s biggest aerospace group expected to visit Jakarta in late March for “further discussion” of the issue.

The move comes amid the latest crash of Boeing’s best-selling passenger jet in Ethiopia. The tragedy, which killed all 157 people on board, followed a similar deadly accident in Indonesia that took the lives of 189 people in October.

“Our passengers have lost confidence to fly with the MAX 8,” Ikhsan Rosan, spokesperson for Garuda said.

Earlier this month, global air carriers and aviation authorities had to ground the troubled jet over safety concerns until the results of a probe into the crashes are known.

The investigation, currently in its early stages, was launched after the first crash of a 737 MAX aircraft operated by Indonesia’s Lion Air.

Boeing’s best-selling 737 Max 8 has been extremely popular among the company’s customers since it hit the market in 2017. Global airlines and leasing corporations have placed some 5,000 orders for the jet.

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FAA reputation ruined while Boeing MAX 8 certification becomes a criminal matter

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FAA restricts drones over high-priority maritime operations

FAA Nominee Steve Dickson formerly a Delta Airlines executive,  should get a prompt confirmation hearing before the U.S Senate,” stated Paul Hudson, of FlyersRights.org and longtime member of the FAA Aviation Rulemaking Advisory Committee (ARAC).

He continued, “The FAA’s safety reputation is in tatters, with current safety officials facing multiple investigations for improper certification of the 737 MAX after two crashes and inadequate emergency evacuation testing, criticism for long delays and defaults in safety rulemaking, lax enforcement of existing safety regulations, ineffective management of air traffic control modernization, mounting congestion delays from lack of airport management and construction, and no Senate-confirmed senior management.”

The New York time reported today about the Boeing MAX 8 crash: As the pilots of the doomed Boeing jets in Ethiopia and Indonesia fought to control their planes, they lacked two notable safety features in their cockpits. One reason: Boeing charged extra for them.

CNN reported, US Justice Department prosecutors have issued multiple subpoenas as part of an investigation into Boeing’s Federal Aviation Administration certification and marketing of 737 Max planes, sources briefed on the matter.

The criminal investigation, which is in its early stages, began after the October 2018 crash of a 737 Max aircraft operated by Lion Air in Indonesia, the sources said. Transportation Secretary Elaine Chao on Tuesday asked the agency’s inspector general to investigate the Max certification.
Criminal investigators have sought information from Boeing on safety and certification procedures, including training manuals for pilots, along with how the company marketed the new aircraft, the sources said.
The Seattle Times reported: The FBI has joined the criminal investigation into the certification of the Boeing 737 MAX, lending its considerable resources to an inquiry already being conducted by U.S. Department of Transportation agents, according to people familiar with the matter.
It’s not yet clear what possible criminal laws could be at issue in the probe. Among the things, the investigators are looking into is the process by which Boeing itself certified the plane as safe, and the data it presented the FAA about that self-certification, the sources said.
The FBI Seattle office and Justice Department’s criminal division in Washington are leading the investigation.

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Ethiopian Airlines refutes wrong reporting of the New York Times

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Ethiopian Airlines would like to refute the following wrong reporting of the New York Times titled “Ethiopian Airlines Had a Max 8 Simulator, but Pilot on Doomed Flight Didn’t Receive Training”

Ethiopian Airlines, one of the safest and most dependable airlines in the world, is pleased to confirm that Ethiopian pilots have completed the Boeing recommended and FAA approved differences training from the B-737 NG aircraft to the B-737 MAX aircraft before the phase in of the B-737-800 MAX fleet to the Ethiopian operation and before they start flying the B-737-800 MAX.

The pilots had also been made aware of, and well briefed on the Emergency Airworthiness Directive issued by the FAA following the Lion Air accident. The content of the airworthiness directive has also been well incorporated in all pilot training manuals, operational procedures and working manuals.

The B-737 MAX full flight simulators is not designed to simulate the Maneuvering Characteristics Augmentation System (MCAS) problems.

Ethiopia Airlines urges all concerned to refrain from making uninformed, incorrect, irresponsible and misleading statements during the period of the accident investigation. International regulations require all stakeholders to wait patiently for the final result of the investigation.

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Russian carriers ‘suspend indefinitely’ all Boeing 737 MAX purchases

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Contracts for the purchase of troubled Boeing 737 MAX aircraft have been suspended indefinitely by a number of Russian airlines, according to Vladimir Afonsky, a member of the Russia’s State Duma (Parliament) Committee on Transport and Construction.

He told TASS, with a reference to Deputy Transport Minister Aleksandr Yurchik, that these were contracts for the supply of several dozen aircraft to UTair, Ural Airlines, Pobeda Airlines and S7.

The indefinite suspension will last “until the circumstances of this situation [the two recent crashes of the Boeing 737 MAX planes] were ascertained,” Afonsky said.

Ural Airlines had ordered 14 MAX aircraft from Boeing, with the first jet expected to arrive in October. Pobeda Airlines (part of the Aeroflot Group) was planning to buy 30 planes. It has not sealed a firm contract yet but had already made an advance payment for the aircraft.

Aeroflot CEO Vitaly Savelyev said earlier that the company could refuse operating twenty MAX planes ordered for Pobeda.

Earlier this month, Boeing 737 MAX planes were grounded worldwide after two similar crashes just months apart. Last October, a Lion Air jet crashed in Indonesia, killing all 189 people on board. On March 10, another crash killed 157 people in Ethiopia.

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Air crash experts: ‘Clear similarities’ between Ethiopian and Lion Air 737 MAX disasters

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French air crash investigators are saying that they have found “clear similarities” between last week’s Ethiopian Airlines crash and last October’s Lion Air disaster. Both 737 MAX aircraft plunged nose-first to their doom.

“During the verification process of the FDR (flight data recorder) data, clear similarities were noted by the investigation team between Ethiopian Airlines Flight 302 and Lion Air Flight 610, which will be the subject of further study during the investigation,” the BEA said in a statement.

Ethiopian Airlines Flight 302 nosedived into a field shortly after takeoff last Sunday, killing all 157 people on board. Lion Air Flight 610 plunged into the sea last October, killing all 189 passengers and crew.

In both cases, the 737 MAX’s MCAS system is suspected to be responsible. The system automatically makes adjustments to the tail angle to keep the plane level in flight. However, false sensor readings can repeatedly trigger the system, forcing the plane into a dive.

The BEA investigators found that the sensor readings in both flights were similar.

In the US, a group of engineers with the Federal Aviation Administration and Boeing claimed over the weekend that Boeing downplayed safety concerns surrounding the MCAS system in a bid to bring the 737 MAX to market before rival Airbus launched its own next-generation narrow body aircraft.

The engineers also claimed that the FAA delegated much of the 737 MAX’s safety testing to Boeing itself, and were content to trust the company’s conclusions. Other air safety regulators around the world then certified the MAX 8 based on the FAA’s thumbs up.

The US Department of Transportation is now investigating the FAA’s approval of the aircraft, the Wall Street Journal reported on Monday. Federal prosecutors have reportedly issued a subpoena to at least one person involved in the development of the 737 MAX.

The aircraft remains grounded worldwide after the Ethiopian Airlines disaster. The FAA has said it may take “months” for Boeing to apply the necessary software updates to rectify any problems with the MCAS system.

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Air crash experts: ‘Clear similarities’ between Ethiopian and Lion Air 737 MAX disasters

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French air crash investigators are saying that they have found “clear similarities” between last week’s Ethiopian Airlines crash and last October’s Lion Air disaster. Both 737 MAX aircraft plunged nose-first to their doom.

“During the verification process of the FDR (flight data recorder) data, clear similarities were noted by the investigation team between Ethiopian Airlines Flight 302 and Lion Air Flight 610, which will be the subject of further study during the investigation,” the BEA said in a statement.

Ethiopian Airlines Flight 302 nosedived into a field shortly after takeoff last Sunday, killing all 157 people on board. Lion Air Flight 610 plunged into the sea last October, killing all 189 passengers and crew.

In both cases, the 737 MAX’s MCAS system is suspected to be responsible. The system automatically makes adjustments to the tail angle to keep the plane level in flight. However, false sensor readings can repeatedly trigger the system, forcing the plane into a dive.

The BEA investigators found that the sensor readings in both flights were similar.

In the US, a group of engineers with the Federal Aviation Administration and Boeing claimed over the weekend that Boeing downplayed safety concerns surrounding the MCAS system in a bid to bring the 737 MAX to market before rival Airbus launched its own next-generation narrow body aircraft.

The engineers also claimed that the FAA delegated much of the 737 MAX’s safety testing to Boeing itself, and were content to trust the company’s conclusions. Other air safety regulators around the world then certified the MAX 8 based on the FAA’s thumbs up.

The US Department of Transportation is now investigating the FAA’s approval of the aircraft, the Wall Street Journal reported on Monday. Federal prosecutors have reportedly issued a subpoena to at least one person involved in the development of the 737 MAX.

The aircraft remains grounded worldwide after the Ethiopian Airlines disaster. The FAA has said it may take “months” for Boeing to apply the necessary software updates to rectify any problems with the MCAS system.

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WestJet suspends 2019 financial guidance over Boeing 737 MAX grounding

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Today WestJet announced that following Transport Canada’s safety notice closing Canadian airspace to Boeing 737 MAX aircraft until further notice, the Federal Aviation Administration’s temporary grounding order and Boeing’s decision to suspend all MAX deliveries to airline customers, it is suspending all 2019 financial guidance provided on December 4, 2018 and February 5, 2019. The financial guidance provided with respect to earnings per share (EPS), return on invested capital (ROIC) and cumulative free-cash flow over the period of 2020-2022 remains in place until further information is known.

Through proactive planning and preparation for a variety of scenarios, including grounding, WestJet enacted its contingency plan immediately and grounded all thirteen of its MAX aircraft within 55 minutes of Transport Canada’s order with only three MAX aircraft outside of its Canadian jurisdiction. WestJet continues to implement and execute its contingency plan to minimize guest disruption and any financial impact. For the remainder of the first quarter WestJet expects it will be able to protect approximately 86 per cent of guests booked on MAX flights and cover approximately 75 per cent of the flights that were intended to operate on the MAX with other aircraft.

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