While Boeing 737 MAX planes remain grounded, they’re not making airlines any money. But even worse is the high costs associated with storage and parking. That cost equates to $2,000 per month per plane, according to Bloomberg. With the grounding beginning in mid-March and re-certification at least a month away (if not more), these costs are piling up.
Storage and maintenance
Most people are familiar with the cost of storage and maintenance in one form or another, whether its a lawnmower, a musical instrument or a vehicle. I had a motorcycle once, and every winter I had to take it off the street and store it away. Every springtime I would have to make sure the battery still had a charge and that the fuel didn’t go stale. It makes me thankful I’m not responsible for the storage of anything larger and more complex. Something like a 737 MAX.
According to Bloomberg, the only daily visitors that the parked 737 MAX aircraft get now are technicians, who visit to extract fuel samples in search of bacterial contamination. Stored in the dry Mojave Desert, Southwest’s 34 737 MAX planes need protection against the sun, wind and sand. In addition to this, planes must be sealed from birds and insects that can get inside the wheel wells and engine air inlets.
Southwest mechanics reportedly spool up the turbofans, turn on flight computers, and extend and retract flight-control surfaces such as wing flaps on a weekly basis. It’s a lot of time, energy and money spent on machines that were meant to be generating a profit.
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Airlines around the world have been demanding compensation. Two months ago, we wrote about how financially-struggling Norwegian is demanding compensation over the issue. And in more recent news, airlines in China are also demanding compensation, and Boeing have allegedly reached some sort of a deal with Ryanair.
Boeing must evaluate their response carefully. Almost 500 737 MAX aircraft all over the world have not flown for the last two months. With so many angry airlines looking to cover their bills, an agreement for compensation with one could lead to an astronomical cost.
It makes sense that if Boeing won’t pay for lost revenue, it could at least pay for storage and maintenance costs. If that were to happen, and the $2,000 per plane per month estimate is accurate, then Boeing would be paying out millions of dollars. It must be paying similar costs for parking it’s fresh-off-the-line 737 MAX planes in Washington, despite slowing production.
No fixed timeline
As we reported earlier this week, the grounding could be lifted as soon as late June. However, FAA representatives have made it clear there is still no firm timetable for the 737 MAX to fly again.
In fact, Daniel Elwell, acting administrator of the Federal Aviation Administration, told reporters that there is still a lot of testing to be done, despite obvious pressure from airlines. He said to reporters:
“If it takes a year to find everything we need to give us the confidence to lift the order [to ground the planes], then so be it…We will not lift the prohibition until it’s safe to do so.”
While there is clear and sizeable financial pressure to lift the grounding, there is an equal amount of pressure to make sure planes are fully safe to fly. This is not a process that can be rushed.
Until then, Boeing and airlines in possession of their “new” 737 MAX aircraft will have to continue paying their storage and maintenance costs. You can find out more about the challenges of the 737 MAX returning to service here.