Following an incredibly tough few weeks for Boeing, there has been some good news for the plane manufacturer. Today, its share price surged higher after confirmation that it will stick to a mid-2020 return for the 737 MAX.
A long year
It has now been a year since the aircraft was grounded due to two separate fatal accidents. Since then, the firm has had to set aside billions of dollars in compensation for airlines. This is to cover damages for operators that have had their services rocked by the grounding.
Additionally, it has had to conduct vigorous fixes and testing with the Federal Aviation Administration. This is to ensure that the jet will be ready for operations. The Street reports on Boeing CEO David Calhoun’s ambitions for the jet. He says that his company is now “very close to the finish line” to enter the controversial plane back into service.
The MAX’s return has been delayed several times and the grounding costs have increased by $2.6 billion over the last quarter and just over $18 billion altogether.
However, despite initial airline frustrations that MAX orders hadn’t been fulfilled and existing fleets could not be deployed, their needs have now shifted. Following the massive drop in global flight demand in the last few weeks, several carriers won’t be in any rush for the aircraft’s return. Especially since so many companies have been trying to delay the arrival of their new aircraft.
These further disturbances have led to Boeing stating that a minimum of $60 billion in government support is needed to help the United States’ aerospace industry’s 2.5 million jobs survive. Calhoun states that his money in reserves but this is needed to pay suppliers.
“We do have liquidity. We have $15 billion in the bank and we are paying our suppliers, and with every dollar we acquire, 70 cents goes directly to the industry supply chain that underpins us.” Calhoun said, as reported by The Street.
“But we need to know that credit markets are open, not only to us, but to the entire supply chain.”
A moment of hope
Nonetheless, Boeing will be happy to finally see the return of the 737 MAX amid a tough year. It will no doubt be another tough year ahead for the company but at least one important issue can finally be resolved.
Simple Flying reached out to Boeing for comment on the 737 MAX’s mid-year return but did not hear back before publication. We will update the article with any further announcements.
What are your thoughts on Boeing’s determination to have the 737 MAX back by June? How will airlines respond to the progress? Let us know what you think of the situation in the comment section.