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United Extends Cancellations Of 737 MAX Flights Until June

Published on Jan 1 2020 10:00 AM in General Industry tagged: Trending Posts / United airlines

United Extends Cancellations Of 737 MAX Flights Until June

United Airlines Co has extended its cancellations of Boeing 737 MAX flights until June 4 as Boeing's top supplier, Spirit AeroSystems Inc, said it will stop making fuselages for the grounded jets.

United's announcement is the longest that any US carrier has scheduled for the grounded aircraft, after American Airlines and Southwest Airlines Co cancelled flights into early April.

Spirit's announcement came after the US Federal Aviation Administration (FAA) said that it still has nearly a dozen steps to complete before approving the jets for flight after a mid-March global safety ban in the wake of two fatal crashes that killed 346 people.

Last month, Boeing said that it is freezing 737 production in January.

The European Union Aviation Safety Agency confirmed its chief, Patrick Ky, told The Financial Times that he expects to approve the 737 Max's return to service in Europe by the end of February. Reuters has reported that the FAA does not expect to allow the plane to fly until February at the earliest.

"Adverse Impact"

"This suspension will have an adverse impact on Spirit's business, financial condition, results of operations and cash flows," the company said, adding it would halt production in January.

The plane-maker has so far shielded major MAX suppliers from a financial hit, continuing to buy parts from suppliers in order to keep the supply chain running and avoid major disruptions when the MAX returns to service.

Spirit has been churning out parts for the jet at a rate of up to 52 units per month, even as Boeing cut its own production to 42 per month earlier this year.

Wichita, Kansas-based Spirit said that it is evaluating "all potential actions to align its cost base with lower production levels expected in 2020".

Boeing's 737 MAX production freeze next year could also hurt General Electric, which supplies the aircraft engines along with France's Safran SA.

JP Morgan analyst Stephen Tusa, a long-time bear on GE, said that there will be a "major hole in growth" for the US industrial conglomerate that has "likely taken in billions of advances".

Analysts and some of the smaller suppliers have warned that a MAX production halt could last up to six months or more, leading to widespread losses across the commercial aerospace supply chain around the world.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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