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China grounds entire domestic fleet of Boeing 737 Max jets after crash

  • News Desk

    Bloomberg

London, United Kingdom   /   Mon, March 11, 2019   /   11:11 am
China grounds entire domestic fleet of Boeing 737 Max jets after crash A Boeing 737-800 airplane of Xiamen Airlines lands at the Fuzhou Changle International Airport in Fuzhou, Fujian province, China, on March 21, 2018. (REUTERS/Stringer/File). Usage: 0 (REUTERS/Stringer/File)

China grounded its fleet of Boeing 737 Max 8 jets after a plane operated by Ethiopian Airlines crashed on Sunday, intensifying scrutiny on the best-selling model which has been involved in two deadly accidents in five months.

Local carriers have until 6 p.m. local time to ground the 96 737 Max jets that they operate, according to Chinese government statements. The order came a day after a 737 Max run by Ethiopian Airlines plunged to the ground on its way to Kenya, killing all 157 people on board.

A blanket grounding in one of the world’s biggest and influential travel markets is a blow to Boeing’s reputation -- and a potential threat to the Chicago-based planemaker’s finances with China’s move raising the prospect other markets could follow suit. Chinese airlines accounted for about 20 percent of 737 Max deliveries worldwide through January, according to the company’s website.

China Southern Airlines has 16 of the aircraft, with another 34 on order, according to data through January on Boeing’s website. China Eastern Airlines has 13, while Air China has 14, Boeing says. Other Chinese airlines to have bought the Max include Hainan Airlines Holdings and Shandong Airlines, the data show.

The single-aisle plane accounts for almost one-third of Boeing’s operating profit and is poised to generate about $30 billion in annual revenue as factory output rises to a 57-jet monthly pace this year, according to Bloomberg Intelligence estimates.

The doomed Ethiopian jetliner left Addis Ababa at 8:38 a.m. local time, and contact was lost six minutes later, the company said in a statement. There were people from 35 nations on board, including 32 Kenyans, 18 Canadians, nine Ethiopians and eight Americans. The United Nations, which is hosting an environmental conference this week in Nairobi, said it lost 19 staff members in the crash.

The pilot of the ET302 reported problems shortly after takeoff and was cleared to return to the airport, said the airline’s chief executive officer, Tewolde GebreMariam. The 737 Max 8 hadn’t had any apparent mechanical issues on an earlier flight from Johannesburg, he said.

The disaster in Ethiopia followed the crash of a Lion Air 737 Max into the Java Sea off the coast of Indonesia on Oct. 29. A preliminary report into that disaster, which killed 189 passengers and crew, indicated that pilots struggled to maintain control following an equipment malfunction.

Indonesia, India

Indonesia’s transportation safety committee said Monday it will discuss the possibility of grounding Boeing 737 Max jets operated by the nation’s airlines. Jet Airways India and SpiceJet, two Indian airlines that use the 737 Max jet, and the country’s regulators have asked Boeing for information following the Ethiopia crash.

Cayman Airways, the flag carrier airline of the Cayman Islands, says it is suspending operations of both its Boeing 737 Max 8 aircraft effective March 11 “until more information is received.”

Boeing earlier said it was preparing to send a technical team to assist the accident investigation of the Ethiopian Airlines plane, which was delivered new in November to Africa’s biggest carrier.

Boeing said it is postponing the “external debut” of its 777X model and related media events scheduled for this week because of the accident. There is no change to the plane’s schedule or progress, Boeing said.

The US Federal Aviation Administration, which originally certified the 737 Max, declined to add to its earlier statement saying it is “closely monitoring developments” in the Ethiopian investigation.

A US-ordered grounding of an entire model of aircraft is extremely rare and in the past has typically not occurred so soon during an investigation when few details are known.

The last time the agency did so was in January 2013 as a result of overheating lithium-ion batteries on Boeing’s 787 model. The agency only acted after the second such incident occurred.