Impact of MAX grounding emerges with earnings reports

Discussion
Returning to service

While JP Morgan sees up to 200 MAXes in Boeing’s inventory before the airplane returns to service, Cowen and Co. sees the number at around 100.

Renton Airport and Boeing Field are already about full of MAXes and Everett’s Paine Field is filling up. Boeing could send planes to Moses Lake, in central Washington, or to Victorville (CA). The grounding order does not prohibit ferry flights.

Nobody, including Boeing, knows when the MAX grounding orders will be lifted, although The Seattle Times late Friday reported that it could be in a matter of weeks, at least in the USA.

The FAA should by now have received the MCAS software upgrade information and test results for certification review.

Its scheduled a meeting May 23 for international regulators to review its findings. No industry officials are invited.

Simulator training

The big question hanging over the airplane and timing is whether regulators will require simulator training as a condition to lifting the grounding orders.

The FAA already has concluded that simulator training won’t be necessary once the MCAS upgrade is installed. All that will be needed is iPad-type training. Boeing previously indicated this will take a half hour.

United and Southwest airlines said they don’t see the need for sim training. American says it will add sim training to the MAX.

Transport Canada says it will require sim training before Air Canada and Westjet can return the airplane to service.

Other regulators haven’t yet made their feelings known.

The FAA said it wants global consensus before lifting the grounding order.

“Therein lies the problem,” writes JP Morgan’s Jamie Baker in a note following the Southwest earnings call. “Boeing is also on record that it would prefer global regulatory acceptance of the MAX software changes. So even if the FAA offers the most expeditious path to a MAX fleet return to service date, efforts to coordinate a global removal of the grounding could add weeks or even months to the timeline if sim training is required.

“Each plane in service require six cockpit crews on average. Do the math. 371 [grounded planes]x12=4,452 pilots to train, and even at only one hour per pilot, that’s a lot of sim time to schedule.”

There are currently only 20 MAX simulators. It’s unclear whether 737NG sims can be used.

Timing

Some airlines already removed the MAX from their schedules until August.

There are some who think the groundings won’t be lifted until September or October.

Boeing clearly hopes for sooner than later.

It already told some in its supply chain to plan for production ramp ups, returning from the temporary reduction now in place at 42/mo.

According to the information LNA learned at the MRO Americas conference April 9-11 in Atlanta, this is the schedule for ramping back up:

  • Rate 42/mo, April and May;
  • Rate 47, June;
  • Rate 51.5, July and August; and
  • Rate 57, September.

Boeing originally planned to go to 57/mo in June or July.

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