Nation & World

Boeing's problems jeopardize billions in orders

Some $600 billion at stake worldwide

Reuters

An American Airlines arrivals board displaying American Airlines flight 2669, which was scheduled to be flown by a Boeing 737 Max 8, arriving from Miami to New York City at LaGuardia Airport, is seen as canceled.
Reuters An American Airlines arrivals board displaying American Airlines flight 2669, which was scheduled to be flown by a Boeing 737 Max 8, arriving from Miami to New York City at LaGuardia Airport, is seen as canceled.
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Boeing’s $600 billion-plus order book for its 737 MAX began shaking after several big customers threatened to reconsider their purchases in the wake of the Ethiopian Airlines crash on Sunday, the second deadly accident involving the plane since October.

VietJet Aviation, which doubled its order to about $25 billion only last month, said it will decide on its plans once the cause of the tragedy has been found.

Kenya Airways is reviewing proposals to buy the MAX and could switch to Airbus’ rival A320. Russia’s Utair Aviation PJSC is seeking guarantees before taking delivery of the first of 30 planes.

That’s as Indonesia’s Lion Air firms up moves to drop a $22 billion order for the 737 in favor of the Airbus jet, according to a person with knowledge of the plan.

Separately, Garuda Indonesia plans to cut orders of the Boeing plane, and a $5.9 billion order from a unit of Saudi Arabian Airlines hangs in the balance.

The 737, which first entered service in the late 1960s, is the aviation industry’s best-selling model and Boeing’s top earner.

The re-engineered MAX version has racked up more than 5,000 orders worth in excess of $600 billion, including planes that have already been delivered.

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Boeing faces escalating financial risk after two disasters involving its newest narrow-body jet in the past five months.

Boeing’s stock since the Ethiopian Airlines crash on Sunday has lost more than 10 percent of its value, CNN reported on its website Wednesday. That would cut more than $25 billion from the company’s market value.

The deadly crash in Ethiopia comes just about five months after the Oct. 29 crash of another Boeing 737 MAX plane, operated by Indonesia’s Lion Air.

The relationship between the carrier and Boeing soured after the manufacturer pointed to maintenance issues and human error at Lion as the underlying cause, even though the planes pilots had been battling a computerized system that took control following a sensor malfunction.

Sunday’s loss of an Ethiopian Airlines 737, in which 157 people died, bore similarities to the Asian tragedy, stoking concern that a feature meant to make the upgraded MAX safer than earlier planes has actually made it harder to fly.

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