Should AS Stay Committed to the MAX?
Jul 1, 2019, 12:49 pm
#31
Join Date: May 2003
Location: SFO, mostly
Posts: 2,204
I have mentioned it before, AS is not really the best size of airline to managed various aircraft types. They had to have separate maintenance facilities and pilots for their previous 737 and MD-80 aircrafts and that will lead to operational problems particularly when AS has so many outposts. The best thing to do is stick with one aircraft type and I believe they will stick with Boeing. Yes, I would be happy to fly an AS 737 MAX particularly with an AS crew.
Jul 1, 2019, 1:16 pm
#32
Join Date: Apr 2003
Programs: B6 Mosaic, Bonvoy LT Titanium (x SPG LT), IHG Spire, UA Silver
Posts: 5,847
Exactly and they are not growing anyway, so although they will need replacements eventually, they don't plan to start growing again until at least 2021, there is still time. By then we could well be in a recession or continue to be in one that started earlier--thus further delaying their growth plans and the need for new planes.
Jul 1, 2019, 1:46 pm
#33
Join Date: May 2013
Posts: 3,361
Disputes, delays and termination are all specified in the purchase agreement. I think the ability of an airline to walk away - or renegotiate- is overestimated.
Jul 1, 2019, 1:51 pm
#34
Join Date: Oct 2012
Location: PDX/HIO
Programs: AS MVPG; Hertz Pres; Tanquery Million Minier
Posts: 375
Given that SEA is by far AS's biggest hub I would think they also get a degree of hometown goodwill for flying Boeing planes. If the plane is deemed airworthy and WN, AA, and UA are also flying it at that time why would AS suddenly say "no thanks"?
Jul 1, 2019, 1:52 pm
#35
FlyerTalk Evangelist
Join Date: Jul 2001
Location: Phoenix, AZ
Programs: HH Gold, AA Gold
Posts: 10,458
The 737 MAX will fly again. I see a parallel to the Ford Explorer tire problems of the late 90's/early 2000's, where nearly 300 lives were lost and 800+ injuries due to the faulty tires. They eventually replaced the tires and the Ford Explorer is still popular and still in production today. So, AS has nothing to worry about here. It's more of a question of how long it will take.
Jul 1, 2019, 2:20 pm
#36
FlyerTalk Evangelist
Join Date: Oct 2014
Posts: 10,904
This is the logic that lead to lax oversight and allowed an unsafe plane to kill all those people.
Boeing has a vested interest to make money. They are only incentivized to provide just enough safety to maximize their profits -- any more than that is against their interests. This is why we are supposed to have independent oversight.
Boeing has a vested interest to make money. They are only incentivized to provide just enough safety to maximize their profits -- any more than that is against their interests. This is why we are supposed to have independent oversight.
Jul 1, 2019, 3:02 pm
#37
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Join Date: Oct 2014
Posts: 10,904
Perhaps a better question is... can AS stay committed to the MAX?
This article suggests that it will take until at least April 2020 before the MAX can be certified as airworthy, assuming that the hardware changes mentioned in the article are necessary:
https://www.forbes.com/sites/peterco.../#64dd22c04206
Can AS go that long without getting new planes delivered?
And of course, the date just keeps slipping and slipping. Remember back in March when Boeing said that they'd have a fix ready in 10 days? Now we are talking about whether the plane will be grounded for more or less than a year. Who knows what else will be found in that time and how much further it will slip.
What if the date slips to the end of 2020? Some time in 2021? There is even a non-zero chance that this plane is never allowed to fly again. It's a LOW chance, but it seems to keep getting higher with every new issue that's found. Just a month ago I thought that it would get certified for sure (whether it was safe or not) but lo and behold, the FAA actually appears to be taking the role of an independent regulator this time around, and as they dig more, they find more issues.
So... if the date slips significantly, or if it's never allowed to fly again, what harm would AS suffer, and if the harm significant, can they mitigate this risk?
This article suggests that it will take until at least April 2020 before the MAX can be certified as airworthy, assuming that the hardware changes mentioned in the article are necessary:
https://www.forbes.com/sites/peterco.../#64dd22c04206
Can AS go that long without getting new planes delivered?
And of course, the date just keeps slipping and slipping. Remember back in March when Boeing said that they'd have a fix ready in 10 days? Now we are talking about whether the plane will be grounded for more or less than a year. Who knows what else will be found in that time and how much further it will slip.
What if the date slips to the end of 2020? Some time in 2021? There is even a non-zero chance that this plane is never allowed to fly again. It's a LOW chance, but it seems to keep getting higher with every new issue that's found. Just a month ago I thought that it would get certified for sure (whether it was safe or not) but lo and behold, the FAA actually appears to be taking the role of an independent regulator this time around, and as they dig more, they find more issues.
So... if the date slips significantly, or if it's never allowed to fly again, what harm would AS suffer, and if the harm significant, can they mitigate this risk?
Jul 1, 2019, 3:10 pm
#38
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Join Date: Aug 2002
Location: Bay Area, CA
Programs: UA Plat 2MM; AS MVP Gold 75K
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Jul 1, 2019, 4:34 pm
#39
Join Date: Jul 2015
Location: SEA
Programs: Hilton/Marriott Gold, Accor Silver
Posts: 2,036
They don't really have much of a choice. They've reduced output from 51 frames per month to 42, which is still a lot of planes piling up, but shutting down production or reducing the rate to a trickle would be a disaster--what are they going to do with the employees? Lay thousands of people off and try hiring them back when the fixes are approved? Or pay them to sit around and do nothing? Keeping the lines running means they're not getting themselves into labor issues, and they don't grow the production backlog too much during the grounding.
Jul 3, 2019, 3:40 pm
#42
Join Date: Apr 2003
Programs: B6 Mosaic, Bonvoy LT Titanium (x SPG LT), IHG Spire, UA Silver
Posts: 5,847
The short answer is yes. They already planned to start returning Airbus aircraft back to the lessors this year and planned to continue shrinking their overall fleet numbers through next year--even with the new MAX deliveries. Worst case scenario, they can extend the leases on a few of the planes they were planning to return to the lessors and send the bill to Boeing. In 2021, if things are still not sorted out then Boeing would be in far more trouble than AS.
AS is taking two years off from their regular growth cycle, so the timing works out fine for them in some ways. Too bad, DL/UA/B6 are growing at a rapid clip and can take more of AS's market share before AS finds some new route planners who can figure out where they will grow next.
AS is taking two years off from their regular growth cycle, so the timing works out fine for them in some ways. Too bad, DL/UA/B6 are growing at a rapid clip and can take more of AS's market share before AS finds some new route planners who can figure out where they will grow next.
Jul 4, 2019, 11:47 am
#44
Join Date: May 2013
Posts: 3,361