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Boeing loses big order for 737 Max aircraft
- dmix 7y ago> Last month IAG said it intended to buy 200 Boeing 737 Max aircraft. So they lost an order of 20 planes but recently signed an order for 200? Not all bad news. Regardless it’s good to see real economic consequences being suffered by a company typically anointed for success by the US gov.
- steve19 7y agoI wonder if IAG was given a huge discount to entice them to make the MAX look like its still in demand and give other customers confidence.
- raverbashing 7y agoI think it's not an order per se, but a letter of intent. I'm sure it contains some pretty good discounts and opt-outs in case Boeing cannot fulfill their Max obligations.
- gsnedders 7y agoAnd note IAG currently has a lot of A320s and no 737s: getting the IAG order would be a big deal, but it could equally just be IAG trying to get into a stronger negotiating position with Airbus.
- berti 7y ago> but it could equally just be IAG trying to get into a stronger negotiating position with Airbus. And Airbus are negotiating from a much stronger position than they were a year ago. Selling a plane that is actually airworthy does that for you.
- JAlexoid 7y agoBA used to have 737s, though.
- rootusrootus 7y agoProbably politics more than anything to do with the crashes.
- chki 7y agoWhat do you mean by "politics"?
- rootusrootus 7y agoThe airline in question is controlled by the government of Saudi Arabia.
- chki 7y agoThat's not really an answer to the question.
- spectramax 7y agoAll airlines should cancel MAX orders. After watching the CEO defend their position in the Q2 shareholder’s meeting, he killed the reputation of Boeing from investors, people and customers. Boeing deserves nothing but financial punishment and consequences of the people that died in the two crashes. Edit: Link to the meeting https://youtube.com/watch?v=xOQmQpKHVWA https://youtube.com/watch?v=xOQmQpKHVWA
- rapsey 7y agoThis completely unrealistic. CEOs will always defend the company. That is their job.
- king_phil 7y agoIt was not written that he was defending the company, but depending their position. Not the same.
- spectramax 7y agoDefinitely. However, managing public relations and the image of the company, maintaining customer relationships is also CEO’s job.
- justicezyx 7y agoDefend in what sense? In defending what made the company great, or just the share price?
- sametmax 7y agoAnd he failed at it, since he lost the confidence of the room after he spoke. There are many strategies you can choose from to defend your company. Not just "we're cool guys".
- alkonaut 7y agoA Japanese CEO crying and bowing in silence is defending the company and the brand. This is defending the short term stock value and nothing else.
- seanhunter 7y agoProbably the surprising thing is how _few_ orders they have lost. My understanding is that this is because it is very very difficult for an airline to change from Boeing/Airbus to Airbus/Boeing. They need to retool their whole supply chain and retrain all their ground staff and pilots. ...but several airlines are talking about it. Notably American https://airlinerwatch.com/american-airlines-eyes-airbus-a321xlr-to-retire-its-boeing-757-200-fleet/ https://airlinerwatch.com/american-airlines-eyes-airbus-a321... and United in the US https://airlinerwatch.com/united-airlines-considers-airbus-a321-xlr-for-replacement-of-its-aging-boeing-757s/ https://airlinerwatch.com/united-airlines-considers-airbus-a... are both considering replacing old Boeing planes with Airbus.
- tyingq 7y agoIf you look at the orders by customer[1], you will see quite a few that exclusively or mostly fly 737's. It would be costly for an airline to have to retrain almost all their pilots, mechanics, etc on a new aircraft...and to purchase all the associated supporting equipment. And, the Max has significantly better fuel efficiency, seating capacity, etc than other 737 models. Falling back to an earlier model isn't easy either. They are banking on the general public forgetting about it over time. Which has happened in the past. [1] https://en.wikipedia.org/wiki/List_of_Boeing_737_MAX_orders_and_deliveries https://en.wikipedia.org/wiki/List_of_Boeing_737_MAX_orders_...
- sametmax 7y ago> They are banking on the general public forgetting about it over time. Which has happened in the past. Which almost always happen. Good strategy. Works for politicians, abusive spouses, big companies. What incentive would they have to do otherwise since society most often offers short outburst of rage, then focuses on something else ?
- TomMckenny 7y agoRegulatory agencies that actually work for the public interest would be a good start.
- burtonator 7y agoGood. They deserve to lose it... Let the market correct.
- open-source-ux 7y agoVOX has a good explainer video on what caused the 737 Max to crash twice for anyone who doesn't know the details. Essentially, Boeing installed sensors and software to automatically push the plane nose down if the plane angle was too steep as it ascended. This software/sensor combination is implicated as the cause of the recent crashes in Indonesia and Ethiopia. The real reason Boeing's new plane crashed twice: https://www.youtube.com/watch?v=H2tuKiiznsY https://www.youtube.com/watch?v=H2tuKiiznsY
- ethbro 7y agoAt this point, I think everyone on HN who doesn't specifically block Boeing articles is aware of the reason.
- _trampeltier 7y agoLast week Boeing announced that it would give $100m to help families affected by the two crashes. Thats not even 300k per died person. And if you search for the price for an 737Max, you guess what it's about 100m per plane ..
- FabHK 7y agoIn Indonesia, minimum wage is around USD 1500 annually, and not everyone gets that. Fresh grads in white-collar jobs might get maybe USD 3000 per year, or USD 5000 in the capital. If you make 5 digits you're doing well, like USD 25k per annum for a data scientist or 60k for a head of IT (those would be exceptional top jobs there, mind you). [1] So, for the median individual in Indonesia it's several decades worth of salary, and it will help the affected families a lot. I assume that the situation in Ethiopia is not too different. [1] https://www.robertwalters.co.id/content/dam/robert-walters/global/files/salary-survey/salary-survey-2019-south-east-asia-greater-china.pdf https://www.robertwalters.co.id/content/dam/robert-walters/g...
- nopzor 7y agoi agree that it's a paltry amount. however keep in mind that this initial 'good faith' payment by boeing does not in any way limit the rights that the families have to compensation that results from the legal system. the actual amount will likely be a lot more than $100m. but we shall have to see.
- _ph_ 7y agoThe problem is, most airlines who ordered or are considering to order the 737 MAX have not much choice. The only real competitor is Airbus. But not only does Airbus alreay have filled order books, so cannot deliver any additional orders in a reasonable time frame, but also this would move the market into a near-monopoly, something that airlines are trying to avoid strongly, as that would remove their negotiation powers with the manufacturer. This shows, that a duopoly can be as bad as a monopoly and can degenerate into one quickly. Consequently, it should be avoided as much as possible. Merging Boeing with McDonnell Douglas was a big mistake by these events. As was, not to develop a successor to the 737 even long before the MAX development started. After 40 years, tweaking a very successfull design isn't enough any more, there should be a proper successor. Unless some more large flaws are discovered, the 737 MAX won't be cancelled and it will be bought. The market is trapped. Airlines, who operate on 737 only will have to change their operations soon, as the MAX can be only a gap-filler now. But on short notice there is no other possible replacement available. Boeing will certainly start a replacment design soon, but that won't arrive till the late 20ies. This might of course be the opening for new aircraft companies to enter the market, e.g. Chineese companies or Japanese.
- ethbro 7y agoIn the back and forth, one thing I haven't heard much on is what could have been done to result in a clean-sheet design. The timeline looks like Boeing was publicly leaning towards a clean sheet redesign until the end of 2011. Then, seemingly out of the blue, American made this announcement on 7/20/2011. "As part of the Boeing agreement, American will take delivery of 100 aircraft from Boeing's current 737NG family starting in 2013, including three 737-800 options that had been exercised as of July 1, 2011. American also intends to order 100 of Boeing's expected new evolution of the 737NG, with a new engine that would offer even more significant fuel-efficiency gains over today's models. American is pleased to be the first airline to commit to Boeing's new 737 family offering, which is expected to provide a new level of economic efficiency and operational performance, pending final confirmation of the program by Boeing. This airplane would be powered by CFM International's LEAP-X engine." http://news.aa.com/news/news-details/2011/AMR-Corporation-Announces-Largest-Aircraft-Order-In-History-With-Boeing-And-Airbus-07202011/default.aspx http://news.aa.com/news/news-details/2011/AMR-Corporation-An... Afterwards, Boeing fairly quickly announces they'll be offering an up-engined 737 NG design. Presumably the issues were noted at some point in the development process (~2013?). At that point... the FAA should have been the one pointing out development issues would cause serious regulatory problems? Afaik, they don't have the funding or personnel for that level of design integration. And like agile, the farther down the road after that decision we get, the more money is at risk and the more constrained options are. So the answer here seems like deeper and earlier regulator involvement in the development phase? I'm honestly having difficulty coming up with a plausible sequence of events that would have resulted in a different outcome. When Airbus released the A320neo mid-development cycle for Boeing, the die seemed cast.
- seldonnn 7y agoLess than a months production. For context, Boeing has over 7 years of MAX production in backlog.
- forgotmypw3 7y agoIt's either Boeing loses orders or airlines lose the orders. Knowing what I've learned about the 737 just from reading the news and analysis here, I wouldn't want to get on one for a few years after it goes back into flying.
- dylan604 7y agoThat totally depends on what the fix for the Max becomes. If it is something along the lines of all planes receive the optional equipment as well as software updates that takes into consideration that the human is constantly countering the decisions software makes the human wins, then I'd be okay with it. As it is, you know that all Max pilots have become or are becoming very familiar with how to disable MCAS.
- forgotmypw3 7y agoHow much testing will the fix undergo before being deployed? How much testing will each fixed plane undergo before the first passenger flight?
- chopin 7y agoFor me the main problem is not MCAS but not knowing what else is being hidden from regulators and pilots.