New York, March 30 2021: Boeing appears to be rallying from the economic downturn from the pandemic and the recent deadly crashes and subsequent 20-month grounding of the 737-MAX, that sent it into crisis mode. But with the vaccine distribution picking up and the skies filling up, there is fuel for recovery in aviation.
In a deal which is the biggest ($12.5billion) since the plane was cleared for operations, was finalized on Monday, whereby budget carrier Southwest airlines, agreed to buy 100 Boeing-737-MAX planes. Boeing could be building more than 600 new MAX jets for Southwest through 2031.
The post-pandemic recovery is likely going to apply to short leisure trips before International, long-haul business travel and so single-aisle planes like the MAX will be useful in the fleet. The new MAX comes with quieter engines and more fuel efficiency, making it an ideal candidate for flying needs of SouthWest.
The announcement also reinforces the trust domestic oriented all-Boeing carrier SouthWest has in the US manufacturer. SouthWest executives also explained the savings in training and maintenance costs by sticking to one type of equipment.
Major airlines continue to burn through cash due to low travel volumes, but improvement is expected in 2021 compared with a disastrous 2020. Southwest said it “remains cautious” on its outlook due to Covid-19 and has not finalized travel schedules beyond May. “The company will continue to plan for multiple fleet and capacity scenarios,” Southwest said, adding that the MAX order gives it greater flexibility to manage “in a variety of economic environments.”
On the other hand, Boeing continues to face litigation from families of victims who died in crashes on Lion Air and Ethiopian Airlines flights, together claiming 346 lives. In January, Boeing agreed to pay $2.5 billion in fines to settle a criminal probe with the US Department of Justice over claims the company defrauded regulators overseeing the 737 MAX.
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