May 27, 2019, © Leeham News: Airlines are increasingly going public with desires to be compensated by Boeing for the grounding of the 737 MAX.
Norwegian Air Shuttle and Spice Jet said shortly after the MAX grounding March 13 they were going to seek compensation from Boeing.
Compensation for delivery delays is also a risk to Boeing. This already has reached $1bn, one aviation lawyer estimates, and stands to climb by billions more, depending on how long new deliveries are delayed.
But Boeing is preparing to take a preemptive defensive move against these latter claims.
According to market intelligence, Boeing’s legal department is already notifying some customers that the grounding falls within the “excusable delay” clause of sales contracts. Other customers have yet to hear from Boeing.
Boeing, says one lessor that lived through that period, essentially dared customers to sue it.
Boeing “generally has expansive excusable delay provisions” in its sales contracts, says one buyer from the manufacturer. Boeing’s standard position is “you can always sue me” if something goes wrong. Boeing will take the position it isn’t liable, this company indicated.
Boeing’s Chicago corporate communications department did not respond to a request for comment.
Indeed, it’s been clear that Boeing CEO Dennis Muilenburg left himself, and Boeing, plenty of wiggle room when he repeatedly said the Lion Air and Ethiopian Airways accidents were a “chain of events” and pilots didn’t “completely” follow procedures.
In addition to the 387 MAXes grounded worldwide, there are 516 more that were scheduled for delivery this year when the MAX was grounded March 13, according to analysis of data.
Deliveries in 2020-21 may also be affected, depending on how the timing of the recertification of MAX rolls out globally and how quickly Boeing ramps up production.
There are 591 MAXes scheduled for delivery in 2020 and 630 in 2021, at the originally projected production rates. Rates were reduced in mid-April to 42 737NGs and MAXes a month. The split between the two models isn’t known outside Boeing, but there few remaining NGs to be delivered in the program run.
I was at the Airbus Innovation Days last week with more than 130 global journalists. Naturally, the Boeing MAX crisis was the subject of a lot of sideline talk among us.
To a person, the journalists are appalled at Boeing’s handling of the communications and messaging, and of Muilenburg’s various statements.
Also to a person, we believe the corporate lawyers, not the corporate communications team, are calling the shots in the messaging.
One reporter likened Muilenburg’s we-own-it, no-the-pilots-did-it approach to his own MCAS.
First, Muilenburg’s nose would rise with the we-own-it approach.
Then his nose would fall with the-pilots-did-it claim.
Then repeat, over and over.
There was general eye rolling that Boeing would engage “celebrities” to help rebuild the MAX brand.
It should be noted that there was absolutely no gloating or even a hint of it by any Airbus people. First, they realize any grounding that happens to Boeing could happen to Airbus.
Second, with two crashes that killed 346 people is not something to gloat about.
Airbus officials empathize with Boeing.