Boeing now pegs the financial impact of the 737 Max grounding at US$18.6b, including estimated costs associated with concessions to customers and disruption to the now-halted production line. The company disclosed its latest estimates Wednesday, the same day it reported a full-year 2019 net loss of $636m, down from a net profit of $10.5b the year before. Boeing now anticipates concessions to 737 Max customers will cost it $8.3b, rising by $2.6b on the previous estimate of $5.6b. Additionally, the company now predicts it will incur $6.3b in additional “estimated costs to produce 737 aircraft included in the accounting quality”. That figure includes $3.6b in costs attributed to the first 9 months of 2019, and an additional $2.6b in Q4. <br/>
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Boeing has announced another 787 production rate cut, saying it plans to lower output of the widebody to 10 aircraft monthly by early 2021. The airframer, which now produces about 14 787s per month, attributes the change to “the current environment and near-term market outlook”. In Nov 2019, Boeing disclosed plans to reduce 787 production from 14 to 12 aircraft monthly in late 2020 and remain at that rate for 2 years. But in a full-year earnings release Wednesday, the company said it would trim production further, to 10 Dreamliners per month in “early 2021”, returning to 12 aircraft per month in 2023. The rate cut comes amid ongoing uncertainty about widebody demand from airlines in Asia, particularly those based in China. <br/>
A new idea for economy seating on aircraft could prove controversial. Entered for the Crystal Cabin Award 2020, which recognises excellence in aircraft interior innovation, the “Flex Lounge” concept involves a seat configuration of 4 people facing each other. The design is aimed at family groups and friends, but the space between the 2 sets of two chairs is very narrow, with what appears to be little legroom, making for a more intimate experience than some passengers might like. Designed by engineering company Heinkel Group, the Flex Lounge would only be available post take-off, and would be reconfigured inflight by cabin crew. The space-saving design has a reduced pitch, meaning passengers are in a more upright position, rather than sitting as normal. <br/>
Asian jet fuel demand is taking a beating from an outbreak of a flu-like virus in China that has led airlines to cancel scores of flights during the peak Lunar New Year travel season. Jet fuel prices have dropped and refiners' profits for the product have slumped to the lowest in more than 2-1/2 years, while industry analysts are cutting their 2020 forecasts for jet fuel and overall oil demand. Airlines and passengers are on guard against the respiratory coronavirus which has so far spread to over a dozen countries. During the 2002-2003 outbreak of SARS - also caused by a coronavirus that originated in China and which killed nearly 800 people globally - air passenger demand in Asia plunged 45%. And now, the travel industry is more reliant on Chinese travellers, and China's share of the global economy has quadrupled. <br/>