As it struggles to raise $10 billion in loans from various banks, Boeing has announced in its latest briefing that in effect the “de-grounding” – there is no such word but they seem to have invented it – of the 737MAX now will not begin until July.
This is not going to come as welcome news for many airlines, who can effectively say goodbye to the aircraft for the whole of the peak Northern Summer season. They face expensive temporary contracts – if they can get the aircraft to provide cover.
It also means that based on the number grounded and the number built waiting for delivery, that most of those won’t be airborne until the end of 2020.
And that’s even worse news for Boeing suppliers as it means that restarting MAX production isn’t viable until the very end of 2020 into January 2021.
The other issue for Boeing is a growing compensation bill, the original $8-$10 billion is already looking more like $12-$14 billion according to analysts. Boeing’s cash flow is being seriously hit by the lack of revenue from its core product.
The fundamental issues around the basic design of the aircraft are now being questioned far more deeply. There’s a growing point of view that the whole project was a mistake and Boeing should have invested in a new single aisle design.