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Home / Business / Boeing 737 Max Grounding Tolls on Airlines and Passengers: NPR

Boeing 737 Max Grounding Tolls on Airlines and Passengers: NPR



Boeing 737 Max aircraft are stored in an area adjacent to Boeing Field, June 27, in Seattle. Airlines all over the world cut flights because of the ground support of the aircraft.

Stephen Brashear / Getty Images


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Stephen Brashear / Getty Images

Boeing 737 Max aircraft are stored in an area adjacent to Boeing Field, June 27, in Seattle. Airlines around the world cut flights because of the ground support of the aircraft.

Stephen Brashear / Getty Images

When Nancy Dunne visits her family outside of Chicago, she likes to fly Southwest Airlines from Newark Liberty International Airport near her home in Maplewood, NJ

As of November, she has to arrange options. [19659008] Last week, Southwest announced that it will no longer fly to Newark. The anchorage of the Boeing 737 Max following two fatal crashes in Ethiopia and Indonesia has forced the airline to cancel flights and consolidate routes to places like Newark, which are less profitable.

"For me, this is really a big deal. I want to figure something out. Maybe it's time for me to move back to Chicago," Dunne says with a laugh as she stands near the airport in the Southwest counter .

When the 737 Max was launched in March last year, carriers around the world were forced to adapt suddenly, cancel thousands of flights and postpone the retirement of some older aircraft.

Now the impact of the ground support on the airlines and their passengers is becoming clearer: less profits and more crowded aircraft.

"Obviously it was a shock to everyone in the industry," says flight analyst Richard Aboulafia. "But of course, this has grown significantly as a problem in recent months."

In recent days, airlines have begun to issue revenue reports for the second quarter, and some major carriers have taken a big hit.

No longer able to use their 737 Maxes, the airlines have been forced to reduce the number of routes they serve. American Airlines has canceled 115 flights a day, potentially affecting around 23,000 passengers a day.

Foreign carriers are also affected. Flydubai, a low cost airline in the Middle East that serves 95 destinations, has canceled 17% of the airplane. European budget company Ryanair warned on Monday that they may have to lay off staff because of the ground support.

With so many cancellations, flights are naturally more crowded. Southwest, which flies more than 737 Maxes than any other American carrier, said last week that the number of passengers per jet had risen during April, May and June.

"For customers, what people will notice compared to the same season last year, the planes have become fuller," said Yi Gao, associate professor at School of Aviation and Transportation Technology at Purdue University.

The cancellations also have an impact on the airlines' bottom line. Southwest said ground support had reduced profits in the second quarter by $ 175 million.

Boeing has set aside nearly $ 5 billion in losses related to the ground support, and some of that will go toward compensating the airlines for the losses. But how much it will pay is to be negotiated individually.

Fortunately, these are good times for the airline industry, with high demand for seats, and airlines like Southwest are still making money.

"At the moment the US economy is strong, so people travel. No matter [if it’s] business people or leisure travelers, they are all traveling," says Gao. [19659008] But the longer the ground support, the more precarious the positions of each airline will be.

Aboulafia notes that the 737 Max is part of a new generation of aircraft that should be much more fuel efficient than its predecessors. Being forced to use older aircraft will make operations more expensive, he says.

"Increasingly, there are other airlines that have new generation Airbus jets, and they" have a competitive advantage "in terms of efficiency," he says. [19659008] There is bad news for carriers like US, US and Southwest that rely on 737 Max, and good news for them – like Delta Airlines – who doesn't.

And right now no one can say probably when the 737 Maxes will be back in the air, and while Boeing hopes to make them fly by October, the 737 Max's fate remains in the hands of regulators.


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