Boeing will soon learn whether the financial fallout from the global grounding of its best-selling jetliner will be a brief jolt -- or a much more painful ordeal that would have repercussions for suppliers and the US economy. Production of the 737 Max has continued at full tilt even though regulators grounded the single-aisle jet following a March 10 crash. Subcontractors have even begun to speed up the manufacturing pace for the 600,000 parts that go into each one of the single-aisle workhorses, Boeing’s largest source of profit. For now, the company and its supplier base are sticking to a carefully orchestrated schedule, which predates the disasters, to raise monthly output to 57 jets by midyear. That’s about 10% higher than the current factory tempo, which is already a record. But if regulators take their time in certifying the Max’s return to the skies, Boeing would be forced to stash hundreds of factory-fresh jets in airports across the Western US. “If they can’t sell these things for six months, they’re going to have 300 or more airplanes parked,” said Stephen Perry, co-founder of Janes Capital Partners. “The working capital tied up in that is quite mesmerizing.” About 16 Max jets are already stored at Paine Field, adjacent to a Boeing factory north of Seattle, while another five sit at Boeing Field to the city’s south, according to 737 production blogger Chris Edwards. Airports from Moses Lake, Washington, to Victorville, in California’s Mojave desert, are preparing to take in the Boeing aircraft. “We continue to build 737 Max airplanes, while assessing how the situation, including potential capacity constraints, will impact our production system,” Paul Bergman, a Boeing spokesman, said by email.<br/>
general
A US-based attorney says eight Kenyan families of people who died in an Ethiopian Airlines crash last month will sue Boeing, the manufacturer of the plane, and the airline for compensation. Carlos A. Velasquez said Wednesday that it's early to tell "who did what and when" but said from the reports in his possession "clearly there were some issues with the aircraft itself, the systems of the aircraft, the operation of the aircraft." Velasquez, of VDA trial lawyers in Florida, said the suits will be filed in a US federal court and will seek compensation for economic loss and loss of a loved one. The crash on March 10 of a Boeing 737 Max 8 jet killed 157 people, 32 of whom were Kenyans.<br/>
The family of a woman killed in an Ethiopian Airlines accident last month plans to file a wrongful-death lawsuit against the airline, the aircraft manufacturer and the parts supplier linked to the crash that left 157 people dead. The woman, Samya Rose Stumo, 24, was a niece of Ralph Nader, the consumer rights advocate and past presidential candidate. Lawyers representing the family said that they planned to file the suit on Thursday morning in Federal District Court in Chicago. A number of other families are pursuing litigation against Boeing, Ethiopian Airlines and Rosemount Aerospace, the manufacturer said to be responsible for an aircraft part that may have played a role in the crash. On Wednesday, Dennis Muilenburg, Boeing’s chief executive, joined test pilots on board one of the company’s 737 Max 7 jets to demonstrate updated software for the MCAS system. “The software update worked as designed, and the pilots landed safely at Boeing Field,” said Gordon Johndroe, vice president for communications at Boeing. “Safety is our first priority, and we will take a thorough and disciplined approach to the development and testing of the update to ensure we take the time to get it right.”<br/>
Chinese airline shares surged after the government announced plans to slash infrastructure levies charged to the companies, a welcome relief for carriers battling oil-price volatility and currency fluctuations in one of the world’s biggest aviation markets. Air China rose as much as 12% in Hong Kong, while China Eastern jumped 20% and China Southern rose 15%. The State Council, China’s cabinet, said that it will cut the civil aviation development fund by half starting July 1, part of a raft of fees that Beijing is reducing to lower costs for businesses. That’s set to bring down annual costs at the airlines by hundreds of millions of dollars. “The cut will bring a considerable lift on the top three airlines’ earnings,” said Ivan Zhou, an analyst at Bank of China International Holdings. “A reduction by half, if applied for a whole year, can lead to an increase in full-year net income somewhere between 15 to 20% for these airlines.” The civil aviation development fund is charged to passengers and carriers for construction of airports and other aviation infrastructure. A reduction by half would see Air China, China Eastern and China Southern saving a combined 3.74b yuan based on their 2018 charges, according to estimates by Tianfeng Securities. Also driving optimism for airline stocks is tight seat supply, which is giving carriers a stronger case to increase fares amid rising air-travel demand. <br/>