You are here: Home » International » News » Companies
Business Standard

Asian airlines' growth plans, profits take a hit on Boeing 737 Max 8 woes

Nearly 400 Max jets were grounded at airlines worldwide in mid-March after the Ethiopia crash

AP | PTI  |  Singapore 

Boeing 787 Dreamliner
Photo: Shutterstock

Asian are cutting routes, revamping their schedules and leasing extra to fill gaps left by the grounding of 737 Max 8s after deadly crashes in and killed 346 people.

So far, regional carriers have managed to avoid major disruptions, but analysts expect that idling the Max 8s, a fuel-efficient update of Boeing's popular 737, will crimp growth plans in the near future.

As investigations into the crashes continue, anticipates a USD 1 billion increase in costs related to the 737 Max, including fixing software implicated in the disasters, adding pilot training and compensating and families of crash victims.

Investigators are examining the role of that pushed the planes' noses down based on faulty

Nearly 400 Max jets were grounded at worldwide in mid-March after the crash.

In Asia, where air passenger traffic is growing the fastest, the groundings are pushing airlines' costs higher at a time of rising fuel prices, squeezing carriers' profits.

Chinese airlines had 96 but have managed to avoid massive cancellations by swapping in other models of aircraft, said of in Hong Kong.

"However, this may limit their capacity growth for the coming peak season," he added.

China Southern Airlines, which has 25 Max 8 jets, will likely revise its targeted growth for passenger capacity, he said.

Indonesian carrier Lion Air, whose Flight 610 disappeared into the sea shortly after takeoff from Jakarta, killing 189 people, said Friday in a statement that it was "operating normally by minimizing the impact" from the grounding of its 10

"continues to serve routes that have been operated by 737 MAX 8 by replacing them using other fleets," said in a statement.

India's has said it would lease 22 Boeing 737-800NG aircraft, nine of which are already in service. The carrier said it also will deploy five Q400

"The new inductions will not just bring down flight cancellations to nil but also help in SpiceJet's aggressive and domestic expansion plans," said in a statement.

Not all carriers, even those without Max 8s, have managed as well.

Scoot, which is owned by Airlines, announced that it would suspend services between and four cities, with the first suspension starting from June. The routes were served by A320.

Scoot, which does not have any Max 8 jets, said in a statement that the cuts were "due to a combination of weak demand and a shortage of resources." "The aircraft shortage is arising as SilkAir, due to the grounding of its MAX 8 fleet, will no longer transfer its Boeing 737-800NG aircraft to in the financial year 2019/2020," it said.

SilkAir, the regional arm of Airlines, withdrew its six from service on March 12, and its parent carrier has reassessed its capacity and fleet, opting to have grow more slowly, said of consultancy CAPA.

Boeing recently said the company was nearly finished an update to the Max that "will make the airplane even safer." But given the concerns that deepened with the crash of an Max 8 on March 10, it's unclear when the update will be deployed and how long it will take for regulators and airlines to decide it's safe for the aircraft to resume operations.

That's a hardship for carriers, especially during the

"Airlines don't know exactly when the Max will be back in service. This makes it a little difficult to plan, even though there is some flexibility within their fleets," Sobie said.

First Published: Tue, May 07 2019. 11:30 IST