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Airlines scramble to replace Boeing jets as grounding cost mounts

The crisis of confidence in Boeing’s 737 Max 8 aircraft after two fatal crashes in five months has left airlines around the world with a variety of expensive problems to solve.

“The problem is how quickly passengers will restore trust,” said Kenya Airways’ chief executive Sebastian Mikosz. “Even if a solution is found in the next four weeks . . . for how much more time are passengers going to keep asking you about this plane?”

Mr Mikosz is in talks to buy 10 of the aircraft but he said that Boeing would need to prove its plane was airworthy before the airline overcame its “apprehension” and placed its order.

Among those which have already ordered, Garuda Indonesia is reviewing its order of 49. VietJet, which signed a $12.7bn order for 100 Maxes — including 20 Max 8s — in February, said it was reserving its judgment until aviation authorities had issued conclusions about the crashes’ causes.

The challenge is more acute for airlines that already rely on the planes.

Norwegian Air, which has 18 Max 8s out of its total fleet of about 160, and another 92 on order, unilaterally grounded them on Tuesday.

In a video on the airline’s website, Norwegian’s chief executive Bjorn Kjos said: “We hope and expect that our Maxes will be airborne soon.” But he added: “It is quite obvious that we will not take the cost related to the new aircraft that we have to park temporarily. We will send this bill to those who produce this aircraft.”

Those airlines that have grounded their fleets have had to scramble for alternatives to ensure current passengers are not stranded and that they can service future passengers until the Max 8 is declared fit to fly again.

Tui, the European travel group which grounded its five Max 8s, said it expected the situation to cost it €3m a week. It said it was “securing spare capacity within our own fleet and via external partners to keep the whole schedule across all countries”.

Titan Airways, an aircraft leasing company, confirmed it had received a spike in requests from airlines in Europe. The company said these were mostly requests for the craft to come fully equipped with staff, known as “wet leasing”.

Titan said most of the requests had been made as part of contingency plans, although some airlines that had grounded their Max 8s had already taken out wet leases. The company added that for now supply was sufficient, but if all affected airlines made requests it would not be able to meet demand.

Norwegian said it was not considering wet leasing and that it would replace a Max 8 with a larger Boeing 787 on its route from Dublin to Stewart, New York.

Wednesday, 13 March, 2019

In the US, the problem is different. Since Canada joined other global authorities in grounding the plane on Wednesday, US carriers led by Southwest, American and United, are the only ones still flying the aircraft.

Southwest Airlines, which has 34 Max 8s, said it remained “confident in the safety and airworthiness” of its fleet, having flown more than 41,000 flights in them. But even as it refused to refund non-refundable fares, it did say it was working with customers who wanted “to switch their reservation to a different aircraft model”, indicative of public unease.

Travel agencies said they were being asked by large US companies to avoid booking staff on flights using the 737 Max 8. Carlson Wagonlit, a business travel management agency that booked about $23bn of trips in 2017, said: “Some clients have expressed an interest in exploring the possibility of temporarily restricting travel on the Boeing 737 Max 8 aircraft.”

The travel group added that this could lead to fewer flight options and make travellers “susceptible to higher airfares, depending on the route”. It said it was working with clients to understand the “practicality and the implications of putting such restrictions in place”.

A senior figure at a second global business travel group said “a small number of large clients are asking for the aircraft type to be blocked from any future bookings”. The companies making the requests were “household names” and the person said they “would not be surprised if it begins to build momentum”.

Additional reporting by Stefania Palma in Singapore, John Reed in Vietnam, Simeon Kerr in Dubai, Anna Gross in London and Patti Waldmeir in Chicago


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