(ringing bell tones)
- [Narrator] Sales of the previously-high-flying Boeing 737
are slumping amid the crisis
surrounding the newest version, the MAX.
Boeing this year has booked only 36 737 orders
and none in the past three months.
Last year, at the mid-year point,
the company had secure 296 orders
for its best-selling plane.
Boeing did get a boost in June
when British Airways parent IAG said it would buy
200 MAX planes, though the deal still needs to be finalized.
On top of the sales slump,
Boeing has more than 100 new MAX jets
sitting undelivered at its facilities near Seattle
because the fleet has been grounded since March.
More than 300 additional MAX planes already with airlines
have also been idled by the global grounding.
That's caused huge disruptions
across the aviation landscape.
The crisis began last October when a new MAX jet crashed
on a flight out of Indonesia.
It was the first crash of a MAX.
Less than five months later,
another 737 MAX crashed in Ethiopia.
A total of 346 passengers and crew
died aboard those two flights.
The similarities between the crashes
sparked safety concerns among regulators
and prompted a global grounding of the MAX fleet.
The impact has reached far beyond the countries
where the planes went down
or Boeing's manufacturing hub in Seattle.
For example, take Southwest Airlines,
the biggest buyer of MAX planes.
For now, the airline has struck the model
from flight schedules through October 1st.
The budget airline had received 31 MAX planes
at the time the fleet was grounded.
More were due for delivery over the summer.
In response, Southwest has had to cancel flights
and juggle schedules.
United, American, and Air Canada are among the other
North American carriers to be hit.
American has also had to cancel more than 100 flights
per day because of the MAX grounding.
Air Canada has rented planes from others,
including Lufthansa and Qatar Airways
to make up for the shortage of seats with the MAX idled,
and IcelandAir has now struck the plane
from its schedule through October.
Passengers who were scheduled to fly
aboard Boeing's MAX fleet also remain rattled.
Alexandre de Juniac, the Director General
of the world's biggest airline association,
said as much in early June.
- The consequences of these tragedies
go far beyond the technical.
Trust in the certification system has been damaged
among regulators, between regulators and the industry,
and with the flying public.
- [Narrator] Other airlines around the world
that also rely on the MAX are scrambling as well.
Many operators told Boeing they expect to be compensated
for losses from the grounding.
Consider the case of European travel company TUI,
one of Europe's biggest MAX operators.
It estimates an earnings hit
of more than $330 million this year alone.
That bill covers the need to cancel some flights
and the need to rent replacement aircraft at high cost
to get customers to their vacation hotspots.
Those involved in making the MAX also are being impacted.
Boeing in April said it would keep building 737s
though at a slower pace.
Rather than cranking out 52 737s a month,
the company announced it would build only 42 a month.
Boeing's vast MAX supply chain
also is grappling with the turmoil.
Spirit Aerosystems said some of its employees
have been put on shorter workweeks, reducing their pay.
Investors haven't been immune either.
After delivering a record number of planes in 2018,
Boeing shares reached a record high early this year,
but since then, the aerospace giant's stock has slumped.
Also seeing their investments fall
are Spirit Aerosystems shareholders.
The stock has declined about 25% since March.
Earlier this year, Boeing was hoping to get the MAX
fixed quickly, but new concerns with the plane's systems
have led to delays.
For example, in June, an FAA pilot found
a new potential problem
with the 737 MAX's flight control system.
Boeing now says it won't submit its MAX fix
to the FAA until September.
The FAA and other regulators have not said when they,
in turn, may clear the plane to resume carrying passengers.
Until that happens, Boeing and its partners
will have to deal with the massive hole
left by the beleaguered 737 MAX.
(pensive mallet percussion and orchestral music)