Emergency order grounding 737 MAX aircraft in the US casts major doubt on the plane’s immediate future, says GlobalData

Last night’s (March 13 2019) announcement that the FAA is grounding 737 MAX 8 and MAX 9 jets casts serious doubt on the plane’s immediate future. Nick Wyatt, Head of R&A, Travel & Tourism at GlobalData, offers his view on the matter:

“With the US and Canada now joining the likes of Australia, China, and the EU in grounding certain 737 MAX models, prospects for the aircraft suddenly look bleaker.

“The short-term future of the MAX must now be in doubt despite an unfilled order book running into hundreds of billions of dollars. This story has been bigger than any of us ever imagined and great reputational damage has already been done.

“Even if it transpires that the aircraft played no role in Sunday’s crash, it’s hard to see faith being restored among passengers any time soon. Any reluctance to travel on such planes will force airlines to reconsider orders, even though there are few viable alternatives to the MAX given Airbus’ waiting times.

“The FAA, along with Boeing, was adamant less than a day ago that it saw no basis for grounding 737 MAX planes, but it has now said that new evidence collected and analyzed at the site led to the decision.

“The statement offers no further detail, but this new evidence along with the Canadian Transport Minister stating that satellite-tracking data indicated ‘a possible, although unproven, similarity’  between the Ethiopian Airlines and Lion Air crashes, has forced a rethink.

“Boeing may well find that airlines seek compensation for lost sales and it may have to foot the bill for costs associated with fixing the MAX planes. This would be highly damaging and may even threaten the long-term future of the MAX series.”

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