Boeing to Suspend Production of 737

The aircraft manufacturer announced on Monday that the production of its flagship aircraft will be suspended from next month. Despite the 737 MAX’s flight ban for nine months, Boeing had continued production at its Renton plant. No return to service date has been brought forward.

Coup d’arrêt pour Boeing et pour son 737 MAX,  cloué au sol depuis la mi-mars . Lundi, l’avionneur américain a annoncé la suspension temporaire de la production de son avion vedette à partir de janvier.

D’après le « Seattle Times », les dirigeants de l’avionneur américain se sont réunis dimanche et lundi à Chicago afin d’étudier différents scénarios, dont un arrêt pur et simple de la production du 737 MAX ou une réduction à 10 ou 12 appareils par mois, au lieu de 42 actuellement. Et ce, jusqu’à l’obtention du feu vert de l’Aviation civile américaine (FAA) à une reprise des vols, qui pourrait ne pas intervenir avant un ou deux mois. Mais c’est bel et bien le scénario d’une suspension qui l’a emporté.

The American aircraft manufacturer says it has “continuously” evaluated its production plans in the event of prolonged immobilization of the MAX. “Following this continuous assessment, we have decided to give priority to the delivery of stored aircraft and to temporarily suspend production of the 737 programs from next month,” he said in a statement released on Monday evening.

Nearly 800 MAX nailed to the ground So far, Boeing has been content to reduce the production rate of the 737 MAX from 52 to 42 per month, in the hope of being able to quickly catch up with its delivery delays as soon as the flight ban is lifted. Nearly 400 Boeing 737 MAXs have accumulated since April around the Renton plant, near Seattle, as well as in other storage sites. To these 400 devices assembled, but never delivered, are added the 389 MAX in service almost everywhere in the world, nailed to the ground for nine months.

A stop already mentioned this summer However, when the semi-annual results were presented in July, Boeing managing director Dennis Muilenburg had clearly announced a possible halt in production of the 737 MAX, if the flight ban was not lifted in the fourth quarter. “If our estimate of the planned return to service changes, we may have to consider other measures to reduce production, including a temporary halt in production of MAX,” said the owner of the aircraft manufacturer.

The worst-case scenario The worst-case scenario has come true. While Boeing had expressed its wish to see the MAX put back into service in December, even January 2020 – at least in the United States – the new director of the FAA, Steve Dickson, showered such hopes by announcing on December 13 that the aircraft will not resume service until 2020. Faced with their supposed laxity in the past vis-à-vis Boeing, the FAA experts have apparently not finished examining the modifications made to the MCAS flight attitude control system in all detail, behind the two crashes of Lion Air and Ethiopian. The dispatcher must also determine what type of training the 737 MAX pilots must undergo before they can resume flights.

No date of return to service There is no return to service date for daylight savings time. This penalizes the airlines, forced to announce repeated revisions of their flight programs. Southwest, the main customer with 34 copies, had already released the 737 MAX from its flight programs until January 15. She had to extend this measure until March 6. For its part, American Airlines, which has 24 aircraft, said it now aims to return to service on April 7, instead of January 15. In Europe, Ryanair does not expect its first MAX before May. He announced several closings of lines and bases, for lack of devices.

Back in flight in the spring? According to the American press, the flight ban could extend until February. After this, several weeks of work will still be necessary for the Boeing teams, to modify the software of the aircraft stored outside of Renton and carry out the usual checks before being able to let them take off. The same goes for airline planes nailed to the ground around the world.

The other regulatory authorities in the various countries where 737 MAXs are operated, including the European Aviation Safety Agency, will also have to have completed their own checks. Which probably won’t happen simultaneously in all countries. In all likelihood, the return to service of the MAXs will, therefore, be in stages and it will take several months for Boeing to return to service the approximately 800 aircraft nailed to the ground, and even longer for a return to normal production.

A huge additional financial cost This even temporary shutdown of production of the 737 MAX could have serious financial and social consequences for Boeing. The aircraft manufacturer employs nearly 12,000 people on the Renton site, entirely devoted to 737. Some of them could end up on forced leave, or even technical unemployment. Which, according to the press release published on Monday, is not yet on the agenda.

In addition, a halt or a further reduction in production would inflate the amount of the additional costs, already estimated at \$ 2.7 billion in the third quarter, to which should be added 5.6 billion exceptional charges already provisioned to cover compensation for customers and suppliers.

After the record profits of 2017, Boeing had published in July the worst quarterly results in its history, with a net loss of \$ 2.9 billion. The annual results for the 2019 financial year, which will be published next month, may well also go into the red, as was the case in 1997. At the time, Boeing had had to stop production of the 737 for three weeks to resolve supply issues.

Possible consequences for Safran A production halt will also have consequences for the main suppliers of the Max program, foremost among which the American Spirit, which manufactures the fuselages of the 737 MAX. But also for the French group Safran, whose joint venture CFM International founded with GE manufactures all 737 engines. Maintaining production at 42 aircraft per month had enabled it to limit its shortfall. But in the event of the production stoppage, Safran, which is one of the rare partners at risk of the program, will also have to review its forecasts.


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