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Boeing to Reportedly Suspend or Shut Down 737 MAX Production

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Reports have surfaced saying Boeing officials are considering temporarily suspending or shutting down production of the 737 MAX aircraft as it remains grounded.

According to Reuters.com, members of the airplane manufacturer’s board of directors met Monday to discuss the issues and future plans, causing shares of Boeing and its suppliers to drop in price on the stock market.

A decision by Boeing to halt MAX production would likely result in significant additional charges for the manufacturer and its suppliers, according to analysts. The company has already cut its production to 42 planes per month.

A source told Reuters that suppliers had asked Boeing to keep producing planes and parts to minimize disruption, but the feeling behind the scenes is the manufacturer will stop producing MAX planes, at least temporarily.

Last month, the Federal Aviation Administration responded to comments from Boeing officials that the grounded 737 MAX fleet would return to service as early as January 2020 by saying the planes would only return to service when all testing was completed.

“The FAA will take all the time it needs to ensure the aircraft is safe,” agency officials said.

Governments around the world have grounded the MAX planes since March after two deadly crashes that killed a total of 346 people were attributed to issues with the 737 jets.

Boeing has faced several struggles in recent months. First, American Airlines announced last week it was canceling flights using the MAX aircraft through April 7, 2020.

In addition, Southwest Airlines received $125 million in compensation from Boeing that the carrier plans to share with its employees.

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United Puts Financial Losses Into Shocking Perspective

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With the demand for travel at an all-time low thanks to stay-at-home directives and severe travel restrictions, United Airlines on Thursday put the industry’s financial losses into a stark perspective.

According to the aviation blog The Points Guy, which had privy to view a virtual town hall held by the carrier, United is losing “over $100 million a day” due to the impact of the coronavirus global pandemic, United president Scott Kirby said.

Kirby conducted the town hall along with current CEO Oscar Munoz, who is stepping down in favor of Kirby later this year.

As The Points Guy pointed out, United cut almost 70 percent of its schedule in April with further cuts likely for May—as all airlines have. In fact, predictions going forward are dire. The International Air Transport Association (IATA) said they expect airlines to lose a collective $61 billion in the second quarter of this year (April, May and June).

United said it will pursue some of the $25 billion in grants available for employee compensation from the U.S. government stimulus package, as well as consider whether to apply for some of the $25 billion in loans. But this is all uncharted territory for the industry, even after the financial devastation from the Sept. 11, 2001 terrorist attacks.

“One of the lessons from this is, our stress test from 9/11 wasn’t stressful enough,” Kirby said in reference to United’s preparations and need for cash to keep operating.

United has not decided whether to permanently retire any jets as a result of the coronavirus, according to The Points Guy.

“If we want to emerge stronger, if we want to emerge the world’s leading airline on the other side of this, we have to have flexibility,” he said.

This post was published by our news partner: TravelPulse.com | Article Source

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