Boeing Update, for Air Canada Pilots — News and Views

[Fanblade]

AC installed dual HUDs in their MAXs since they've been grounded. It doesn't appear they are planning to dump them.

That equates to 24 of 61 fins. The question is what happens with the remaining 37 fins, when the A220 options and AT 321 options, can cover it instead.

From a business perspective. Everything from public acceptance of the Max to will it fly again. Is it good risk management to expose yourself to more than you have to?

Speaking of the 737 HUD.

FAA fines Boeing for unapproved HUD sensors on almost 800 737s

https://www.flightglobal.com/airframers ... 34.article

[L39Guy]

Given Covid-19, maybe now would be a great time to just remove these aircraft from the fleet for good. Retrain, slow hiring for 6 months... buy up planes from airlines that have gone under (320s) and expand the A220 order with the options.

The way things are looking in China these days who knows maybe lots of A330's up for sale for cheap when Dragon or Cathay kicks the bucket. Or HK Airlines.

Absolutely. Dump the MAXs. Would not make the money back over the remaining life of the aircraft at this point.

AC owns all 24 of the MAX's on the property and it appears that the balance of the aircraft (37) are to be purchased rather than leased. I would imagine that the market value of the MAX is pretty dismal right now so if one were to "get rid of them" the income statement and balance sheet would take a massive (billions of dollars) hit. Not something you want to be doing at any time, let alone now.

Of note too, according the the Q4 Management Discussion and Analysis, AC has already cashed on cheque from Boeing owing to the MAX inconvenience and is in negotiations for more to compensate.

[Fanblade]

AC owns all 24 of the MAX's on the property and it appears that the balance of the aircraft (37) are to be purchased rather than leased. I would imagine that the market value of the MAX is pretty dismal right now so if one were to "get rid of them" the income statement and balance sheet would take a massive (billions of dollars) hit. Not something you want to be doing at any time, let alone now.

Of note too, according the the Q4 Management Discussion and Analysis, AC has already cashed on cheque from Boeing owing to the MAX inconvenience and is in negotiations for more to compensate.

So why would AC want to take an asset of “dismal value” if they had other options? That is currently the biggest hurdle of course. A NEO is potentially years away. Do many airlines have a choice? They still have to operate and operate competitively. That fuel burn reduction can’t be ignored financially.

The thing is AC is in a position that it does have a choice.

At some point an argument can be made for breach of contract putting a lot of leverage in the airlines hands. Litigation is not the best option for either side. A few airlines now have dropped aircraft orders without consequence via negotiations. Boeing has a long enough order sheet that they can afford to let airlines out of future obligations in lieu of financial compensation. They have there own cash issues to protect. AC is still in negotiations.

All we can say for certain is that for now AC owns 24 Max. Until negotiations are finished we won’t know anything further. Asking questions about it at Flight Ops meetings will only generate non answers. Body language was more telling. Of course all that revealed was discomfort around the subject of - The Boeing relationship/ Compensation / Airbus rumour.

Time will tell if the bid cancelation was done because the narrow body fleet composition is about to change.

[yycflyguy]

I think Calin is holding onto hope that he’ll be able to get a giant settlement from Boeing (or at least a few free 787’s) in exchange. If they decide to turf the fleet, that would reduce their leverage for such a move

Rumour is that they have already been receiving monthly compensation from Boeing - however, will the pilots be compensated for their losses?

[goldeneagle]

That fuel burn reduction can’t be ignored financially.

Well maybe it can. Oil opens at 32.75 and 20 dollar oil predictions after Saudi Armaco drops the price for crude. OPEC and Russia not seeing eye to eye these days and opec no longer able to manipulate oil prices up.

Some older engines may not look so bad for a while.

[Squid]

“Some older engines may not look so bad for a while”
Sounds good but if we are going deep into the recession what people or what cargo are ya gonna fly?

[rudder]

“ Boeing reported Wednesday that it logged more commercial aircraft cancellations than new orders in February, marking a bleak start to the year for the manufacturer already reeling from two fatal crashes of its best-selling plane.

Boeing said Air Canada cancelled 11 Max aircraft while some other customers converted orders for larger planes. For example, aircraft leasing firm Air Lease converted nine Max planes into three 787s. Oman Air converted 10 Maxes into four 787s.”

[Daniel Cooper]

They were supposed to get 13 more, right? So they cancelled 11 and are still taking 2?

[KenoraPilot]

So 55x 737Max vs the 67 they were planning?

[derateNO]

Wasn't there a memo or something that we were going to cancel the options? And stick with the 50 or whatever...

I didn't think this was new news.

[rudder]

MAX options were cancelled a long time ago. These are cancelled firm orders from original AC purchase agreement.

https://www.wsj.com/articles/boeing-boo ... 1583938351

[Fanblade]

MAX options were cancelled a long time ago. These are cancelled firm orders from original AC purchase agreement.

Correct. The memo referred to above was originally a delay in the 11 Max 9 deliveries.

Original order was 61 Max 8/9.

Now down to 50 Max 8 only.

24 on property

12 currently sitting with Boeing undelivered.

14 yet to be built.

How the remaining 26 not yet delivered plays out will be interesting.

What will AC’s Max fleet end up at. 24, 36 or 50?

Of note all 50 Max positions are currently showing on the equipment bid. A large rejig will need to take place if the total Max numbers drop from 50.

[Ironman2909]

May I add that we have between 6-8 planes on the line that are being built at this time. Those will have the wiring modification done. So as soon as we're clear to fly, it will be these ones flying this summer. Also, we're getting more ETOPS fins, total on the fleet should be 25 planes.

[yycflyguy]

May I add that we have between 6-8 planes on the line that are being built at this time. Those will have the wiring modification done. So as soon as we're clear to fly, it will be these ones flying this summer. Also, we're getting more ETOPS fins, total on the fleet should be 25 planes.

She won't fly this summer... but interesting that those would be the first.

[rudder]

May I add that we have between 6-8 planes on the line that are being built at this time. Those will have the wiring modification done. So as soon as we're clear to fly, it will be these ones flying this summer. Also, we're getting more ETOPS fins, total on the fleet should be 25 planes.

She won't fly this summer... but interesting that those would be the first.

FAA certification by ....... June? TC certification will take longer. August/September.

I see them back on Hawaii by October. Therefore the need for ETOPS airframes.

[dhc#]

https://www.flightglobal.com/fleets/air ... 92.article

[Raymond Hall]

From CNBC today: AC Cancels orders for 11 Aircraft:

Boeing 737 Max cancellations pile up in bleak start to the year

Boeing reported Wednesday that it logged more commercial aircraft cancellations than new orders in February, marking a bleak start to the year for the manufacturer already reeling from two fatal crashes of its bestselling plane.

Boeing said Air Canada canceled 11 Max aircraft while some other customers converted orders for larger planes. For example, aircraft leasing firm Air Lease converted nine Max planes into three 787s. Oman Air converted 10 Maxes into four 787s.

The cancellations tipped Boeing’s monthly orders into negative territory, the company said. The Chicago-based manufacturer logged 18 gross orders last month — its first orders of the year — but it also posted 46 cancellations, bringing its total net sales activity for the year to 28 cancellations.

…

Boeing is now facing a fresh challenge with the spread of the coronavirus, which is roiling the airline industry. Bookings are cratering and airline chiefs this week warned it could worsen before it improves, as travelers opt to stay home and large companies call off business trips.

The company is now drawing down a more than $13 billion loan it secured in January earlier than expected to shore up funds amid coronavirus-led market volatility, according to a person familiar with the matter.

Boeing shares were down nearly 14% at $199 in midafternoon trading, the lowest price since July 2017. The drop was shaving more than 200 points off the Dow Jones Industrial Average.

https://www.cnbc.com/2020/03/11/boeing- ... -year.html

[Raymond Hall]

From today's Wall Street Journal:

Two FAA Officials Are Key Witnesses in Criminal Probe of Ex-Boeing Pilot

Federal aviation staffers dealt with Mark Forkner on pilot-training requirements as part of approval process

Federal authorities are seeking to build a criminal case against a former Boeing Co. BA +8.68% pilot based on statements from U.S. air-safety regulators who say he failed to provide them crucial details about the 737 MAX jet’s flight-control system, according to people familiar with the matter.

A pair of Federal Aviation Administration officials who dealt with Boeing pilot Mark Forkner on pilot-training requirements for the FAA’s approval process years before dual crashes of the MAX are now considered key witnesses in the investigation, these people said.

The central role of FAA officials Stacey Klein and William Schubbe in the criminal probe hasn’t been reported before. It suggests Justice Department prosecutors and federal investigators are seeking to center a fraud case on claims that Mr. Forkner misled regulators about how a flight-control feature known as MCAS worked. Ms. Klein oversaw MAX pilot manuals and training, while Mr. Schubbe is a manager in the FAA office that helps determine pilot training requirements for new aircraft.

Article continues…

https://www.wsj.com/articles/two-faa-of ... lead_pos4

[Daniel Cooper]

Ironic that many of these airplanes would be parked now anyways. The pressure to get them back in the air has certainly been reduced.

[Raymond Hall]

From today's Wall Street Journal:

FAA Considers Enhanced Inspections After Southwest Jet Suffers Structural Problem

Crack in fuselage during flight prompts reassessment of maintenance checks for certain Boeing 737 models

U.S. air-safety officials are investigating potential structural problems affecting hundreds of Boeing 737 jets following an in-flight incident that left a 12-inch rupture in the aluminum skin of a Southwest Airlines plane.

Nobody was hurt on Monday night’s flight, en route from Las Vegas to Boise, Idaho, as the damaged aircraft descended to a safe altitude and the pilots landed at their destination, according to the carrier and the Federal Aviation Administration. The plane’s cabin gradually lost pressure but it stabilized after pilots descended to a lower altitude, and oxygen masks never deployed.
…
The FAA and Boeing have been devising enhanced maintenance procedures for the same section of what is called the crown of 737 jets since 2008. The original safety directive was replaced by revised inspection requirements in 2016 and again in 2017.
…
The 2017 safety directive said Boeing determined that the skin of certain 737 models is subject to widespread metal-fatigue damage. If the weakness isn’t detected and corrected, according to the FAA, it could “result in reduced structural integrity of the airplane.”

https://www.wsj.com/articles/faa-consid ... _lead_pos7