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With the US and Canada on Thursday joining the growing list of countries that have grounded the Boeing 737 MAX aircraft, the global airline industry is likely to take a huge financial hit.
On Thursday, Boeing said it had determined “out of an abundance of caution and in order to reassure the flying public of the aircraft’s safety to recommend to the FAA (Federal Aviation Administration of the US) the temporary suspension of operations of the entire global fleet of 371 737 MAX aircraft.”
Meanwhile, business consulting firm Frost & Sullivan has estimated that the impact of this grounding for all the airlines together would add up to more than $10 million a day. “If the grounding applies to all aircraft, coupled with a deferral of the more than 400 deliveries planned for 2019, the bill will amount to more than $4 billion in 2019,” the study said.
It pointed out that airlines will seek compensation from Boeing, but the impact on their profitability and operations cannot be underestimated. “It is enough to push many of the smaller and financially struggling airlines to the brink of bankruptcy,” it added.
Fare hike
Meanwhile, flight costs in India are rapidly increasing.
With close to 200 daily flights being taken out of the system due to issues at Jet Airways and IndiGo, and now the ban on the Boeing 737 MAX 800 aircraft of SpiceJet, domestic airfares are rising exponentially.
Slow recovery
An industry watcher with decades of experience in managing the safety of flight operations in India said that the temporary grounding could last for at least four months.
“By April-end they have to get the software upgrade design, after which there will be the software’s validation and testing in case it is misbehaving. After this the FAA will have to accept the Airworthiness Directive and then it will finally be implemented,” the industry watcher said.
Incidentally, India’s record in getting planes back in the air once they have been grounded has not exactly been good. In the 1990s, when a civil aircraft was grounded, it took the authorities almost 18 months before it was allowed to restart operations.
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