(Reuters) – Airlines from North America to the Middle East kept flying the 737 MAX 8 on Monday after Boeing said it was safe, in stark contrast with a slide in the planemaker’s shares on worries over Sunday’s Ethiopian Airlines crash that killed all 157 on board.
It was the second such incident involving the latest model of the plane since October, when all 189 people on board a Lion Air 737 MAX 8 died in Indonesia, putting the jet under the safety spotlight and prompting questions from passengers.
Low-cost giants including Southwest of the United States and Gulf airline flydubai, which rely on short trips and fast turnarounds, said they would continue to fly 737s.
“We remain confident in the safety and airworthiness of our fleet of more than 750 Boeing aircraft,” said Dallas-based Southwest, which is the largest MAX 8 operator with 31 in its fleet from an order of nearly 300 MAX aircraft.
The support came despite China ordering its own airlines to ground the jet, the latest version of the industry’s most-sold model, a move followed promptly by Indonesia and Ethiopia.
Most others said they had no plans to ground the aircraft, which analysts said would be costly and disruptive for carriers that rely on them to fly directly to specific destinations or to feed customers to hubs for profitable long-haul flights.
Boeing, which had up to $25 billion wiped off its share price on Monday, said that it so far had no basis to issue new guidance to operators. Analysts said this also implied airlines would be unable to recoup any losses from grounding the jet.
“As long as the aircraft is viewed as airworthy by the certification process – which in this case primarily means the Federal Aviation Administration — airlines will continue to fly it,” said James Halstead, managing partner at Aviation Strategy.
American Airlines also backed the jet, which sells for $112 million at list prices or a net value of about $50 million after typical discounts, according to industry sources.
“At this time there are no facts on the cause of the (Ethiopian) accident other than news reports,” it said.
Industry sources said pressure could however grow on U.S. authorities to respond to any early findings from a crash probe and U.S. Transportation Secretary Elaine Chao said Washington was reviewing 737 MAX 8 crashes “very seriously”.
SOURCE REUTERS, Read more..
