Boeing CEO points to risk and responsibility in fresh statement

Saul Bowman
April 10, 2019

Suppliers to the U.S. firm including Rolls-Royce lost out as investors digested the news announced on Friday afternoon, which is the latest blow to the embattled plane maker after the second fatal crash of its newest jet model in five months killed all 159 people on board.

Southwest Airlines Co said on Monday it was pulling out all Boeing Co's 737 MAX jets from its flight schedules through June 7, extending its earlier timeline by a week.

Boeing said last week that it will cut production of its troubled 737 Max airliner this month, underscoring the growing financial risk it faces the longer that its best-selling plane remains grounded after the two crashes.

An American Airlines Boeing 737 MAX 8 flight from Los Angeles approaches for landing at Reagan National Airport shortly after an announcement was made by the FAA that the planes were being grounded by the United States in Washington, US March 13, 2019.

Boeing and the FAA said they are working on an upgrade of the 737 Max software to deal with that safety feature.

Since it has paused deliveries of new planes, the company is stockpiling finished Boeing 737 MAXs in Renton factory. Epstein cautioned that margins would decline "due to penalties owed to customers, weaker negotiating position with airlines as airlines consider cancellations, and operational inefficiencies from the production disruption".

In all, 346 people died in the crashes. The software update is part of a package of proposed changes, including additional training for pilots and updated manuals, that Boeing is expected to submit to the Federal Aviation Administration in coming weeks.

In mid-March, Ethiopian transport minister Dagmawit Moges said black box data from the doomed flight showed "clear similarities" to the Lion Air crash.

In addition to the initial 737 Max delays, BofA estimates it will take Boeing through 2021 to catch up to delivery orders for the aircraft.

Boeing said it would not comment on the lawsuit directly and extended its "heartfelt condolences and sympathies to the families and loved ones of those onboard Ethiopian Airlines Flight 302".

"Safety is our responsibility, and we own it", asserted Muilenburg.

In a statement, the company had been quoted saying on Friday (April 5th) that the output would be trimmed to 42 aircrafts per month from previous 52 and the decision would be effective from mid-April.

Additionally, Muilenburg said that he's asked the Boeing Board of Directors to establish a committee to review the company-wide policies and processes for the design and development of the airplanes they build.

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