The 737 Max crisis poses an incalculable reputational risk. Will airlines lose confidence in the Max, Boeing's best-selling jet with 4600 orders pending?
When Boeing's Dreamliner was grounded in 2013, it took more than $US20 million and three months to fix the problem.
With all of the Max planes now grounded around the world, Boeing's first priority is developing a fix. Boeing has been working with US regulators to roll out a software update and new training guidelines in the months since the first crash, off Indonesia in October. "It's quite obvious that we will not take the cost related to the new aircraft that we have to park temporarily," said Bjorn Kjos, chief executive of Norwegian Air, which had to take 18 of the planes out of service after an order from European regulators on Tuesday. "We will send this bill to those who produce this aircraft."
The bigger challenge for Boeing is how it will handle future orders. If deliveries are delayed because the plane needs to be redesigned, the manufacturer is likely to have to offer discounts to carriers with orders.There is also a broader risk that, if the passenger backlash to the MAX lasts, the manufacturer could lose some corporate customers in the long run. Such a shift would give an advantage to its European rival Airbus, which makes a similar fuel-efficient plane, the A320neo.
"The manufacturers do not pull up the bridge across the moat when this happens," Mr Ornstein said. "It's much more of a co-operative relationship." Through a program established in 2005, Boeing and other aircraft manufacturers have been able to choose employees to help certify their planes for regulatory compliance. The program is meant to help the FAA stretch its limited resources. But critics say that system gives too much authority over the process to Boeing.
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