Latest Boeing 737 glitch stalls China travel bounceback

Shandong Airlines, SilkAir, Spice Jet and Xiamen Airlines planes grounded after new electrical problem causes carriers to temporarily remove them from service

Latest Boeing 737 glitch stalls China travel bounceback
Grounded Boeing 737 MAX aircraft are seen parked at Boeing Field in Seattle. File photo by Reuters.

(ATF) Half a dozen Asian airlines have had their schedules curtailed after an electrical problem became the latest issue to ground the troubled Boeing 737 MAX aircraft, delaying a recovery in China's travel sector.

Shandong Airlines, SilkAir, Spice Jet and Xiamen Airlines were hit by the grounding, as was Minsheng Leasing. US regulators said they were working with Boeing to assess the problem that has affected more than 100 planes.

The problem, which surfaced during Boeing's manufacturing process, has so far not significantly affected most airlines, but the Chinese airlines were hoping to take advantage of a bounceback in flying.

China’s travel activity has soared post-Covid-19 with domestic airport departures in February just 1% below pre-pandemic levels, according to a recent Barclays analysis. 

Airlines are gearing up for a busy Labour Day holiday next month, while the return of domestic travel has prompted Chinese online travel platform Trip.com Group to seek to raise about $1.4 billion through a Hong Kong secondary listing.

Trip.com said it would use the proceeds to fund an expansion as well as general corporate purposes and working capital needs. The company has a market value of $23.3 billion.

BONDING AND GROUNDING

The US Federal Aviation Administration (FAA) described the new 737 problem as "an electrical bonding and grounding issue," according to an agency notice to civil aviation authorities.

"Boeing notified the FAA on April 7 that it recommended operators temporarily remove these airplanes from service to address a manufacturing issue that could interfere with the operation of a backup power control unit," an FAA spokeswoman said.

Boeing announced on April 9 that it had notified 16 airlines flying its 737 MAX planes of the issue, leading to their immediate grounding.

The problem affects three parts of the plane in models built after Boeing made design changes in early 2019, and caused the grounding of 106 planes worldwide, 71 of which are registered in the United States, the FAA said.

The electrical issue is a new setback after the MAX was finally cleared to return to service in November 2020 after a 20-month grounding following two fatal crashes.

Boeing has had a tumultuous past couple of years. Even before 2020’s Coronavirus pandemic, the company was already experiencing sharp declines in various metrics due to the MAX controversy.

Boeing’s revenue of $58.16 billion in 2020 was a 42.5% decrease compared with 2018’s record-high revenue of more than $101 billion.

ORDERS CANCELLED

In 2018 and early in 2019 the 737 MAX 8, experienced two crashes in the span of five months. Both crashes put the blame on Boeing’s new flight control system and resulted in the grounding of the entire global fleet of the 737 MAX and orders were either suspended or cancelled.

In 2020, rival Airbus registered 383 gross orders compared to Boeing’s 184. That year Airbus also delivered almost 400 more aircraft than Boeing, amounting to 566 and 157 respectively.

Airlines are steadily adding Boeing 737 MAX-family aircraft to their flight schedules as regulators lift their bans on the model, paving the way for operators to shift focus from reassuring hesitant customers to reaping the benefits of more efficient assets.

According to Aviation Week, Boeing already could not match the performance of the baseline Airbus A321neo with its 737-9 and -10, but the A321XLR promises to take that advantage further by shifting it into the long-haul networks of airlines eagerly waiting for lower capacity and efficient lift.

With reporting by Agence France-Presse

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