Boeing flights have been grounded in China. Picture: Flightradar24
Boeing flights have been grounded in China. Picture: Flightradar24

Major gap that could destroy Boeing

The best-selling airliner in history - the Boeing 737 - is at a crossroads after two horrific crashes in less than six months that bear disturbing similarities.

Shares of Boeing tumbled as airlines in Ethiopia, China and Indonesia grounded MAX 8 jets - the new model of the iconic airliner that only began taking to the skies two years ago.

The fallout for Boeing, following the Ethiopian Airlines crash on Sunday that killed all 157 people on board and the Lion Air downing in October that killed 189 people, is massive.

In particular, analysts say the decision to ground flights in China is particularly damaging - as the Asian superpower is tipped to soon be the world's first trillion-dollar market for jets.

In its own estimates Boeing says China will need 7690 commercial jets to meet its travel demands by 2037.

As live maps of 737 MAX 8 flights show, a major gap is opening up over China, and it could spell trouble for the American company.

"A suspension in China is very significant, as this is a major market for Boeing," aviation research firm FlightGlobal's Asia managing editor Greg Waldron told CNN.

The major roadblock could even spell the end of the flight giant's global dominance of the market.

The MAX 8 is the newest version of the 737 with more fuel-efficient engines. It is a central part of Boeing's strategy to compete with European rival Airbus.

But the decision to ground planes in China couldn't have come at a worse time for Boeing as it dukes it out with Airbus and Commercial Aircraft Corporation of China, or Comac, to be the major player in the rapidly-growing Chinese market.

Sunday's crash is likely to renew questions about the 737 MAX 8's safety.

However, some safety experts have cautioned against drawing too many comparisons between the two crashes until more is known.

Besides the groundings by airlines in Ethiopia, China and Indonesia, Caribbean carrier Cayman Airways, Comair in South Africa and Royal Air Maroc in Morocco temporarily grounded their MAX 8s. Ethiopian Airlines decided to ground its remaining four 737 MAX 8s until further notice as "an extra safety precaution," spokesman Asrat Begashaw said.

The carrier had been using five of the planes and awaiting delivery of 25 more. But Chicago-based Boeing said it did not intend to issue any new recommendations about the aircraft to its customers.

It plans to send a technical team to the crash site to help investigators and issued a statement saying it was "deeply saddened to learn of the passing of the passengers and crew" on the jetliner. Among the airlines still using the plane are Southwest, American and Air Canada.

It was unusual for authorities to take the step of grounding planes, and it was up to each country to set standards on which planes could fly and how those planes were maintained, said Airsafe.com Foundation director and aviation safety analyst Todd Curtis.

"If there is a suspicion … that there's not only something inherently wrong with 737 MAX 8 aircraft, but there are no procedures in place to cure the problem then, yes, they should either ground the plane, or there are several levels of things they could do," Mr Curtis told AP.

Boeing said in a statement it was "deeply saddened" by the crash on Sunday, but it had no reason to pull its popular aircraft from the skies.

As Ethiopia mourned the 157 victims of the plane that went down in clear weather shortly after takeoff, investigators found the jetliner's two flight recorders at the crash site outside the capital of Addis Ababa.

An airline official, however, said one of the recorders was partially damaged and "we will see what we can retrieve from it".

Ethiopian authorities are leading the investigation into the crash, assisted by the US, Kenya and others.

People from 35 countries died in the crash six minutes after takeoff from Ethiopia's capital for Nairobi. Ethiopian Airlines said the senior pilot, Yared Getachew, issued a distress call and was told to return, but all contact was lost shortly afterwards.

The plane ploughed into the ground at Hejere near Bishoftu, scattering debris.

Kenya lost 32 people, more than any country. Relatives of 25 of the victims had been contacted, Transport Minister James Macharia said, and taking care of their welfare was of utmost importance.

"Some of them, as you know, they are very distressed," Mr Macharia said. "They are in shock like we are. They are grieving."

In Addis Ababa, members of an association of Ethiopian airline pilots wept uncontrollably for their dead colleagues. Framed photos of seven crew members sat in chairs at the front of a crowded room.

Canada, Ethiopia, the US, China, Italy, France, Britain, Egypt, Germany, India and Slovakia all lost four or more citizens.

At least 21 staff members from the United Nations were killed in the crash, said UN Secretary-General Antonio Guterres who led a moment of silence at a meeting where he said, "A global tragedy has hit close to home."

Both Addis Ababa and Nairobi are major hubs for humanitarian workers, and some had been on their way to a large UN environmental conference set to begin on Monday in Nairobi. The UN flag at the event flew at half-staff.

 

Boeing’s stock fell 7 per cent to $391.80 in afternoon trading. Picture: AP Photo/Richard Drew
Boeing’s stock fell 7 per cent to $391.80 in afternoon trading. Picture: AP Photo/Richard Drew

The crash shattered more than two years of relative calm in Africa where travel had long been chaotic. It also was a serious blow to Ethiopian Airlines, which has expanded to become the continent's largest and best-managed carrier and turned Addis Ababa into the gateway to Africa.

The state-owned carrier has a good reputation, and the company's CEO told reporters no problems were seen before Sunday's fight. But investigators also will look into the plane's maintenance, which may have been an issue in the Lion Air crash.

The plane was delivered to Ethiopian Airlines in November. The jet's last maintenance was on February 4, and it had flown just 1200 hours.

China's Civil Aviation Administration said it ordered airlines to ground all 737 MAX 8 aircraft as of 6pm (local time) on Monday, in line with the principle of "zero tolerance for security risks".

It said it would issue further notices after consulting with the US Federal Aviation Administration and Boeing.

China Southern Airlines is one of Boeing's biggest customers for the aircraft. Comair, the operator of British Airways andKulula flights in South Africa, said it had grounded its Boeing 737 MAX 8 while it consults with Boeing, other operators and technical experts. The statement did not say how many planes were affected.

 

Wrenelle Stander, executive director of Comair's airline division, said Comair "remains confident in the inherent safety of the aircraft".

An official with Royal Air Maroc said the carrier in Morocco had halted the commercial use of its sole operational model, pending tests and examinations. The official, who spoke on condition of anonymity in line with departmental rules, said the plane was scheduled to fly on Monday from Casablanca to London but was replaced.

"Safety is our No. 1 priority and we are taking every measure to fully understand all aspects of this accident, working closely with the investigating team and all regulatory authorities involved," Boeing said in a statement.

Boeing's stock fell 7 per cent to $391.80 in afternoon trading.

With AP


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