The Federal Aviation Administration has proposed fining Boeing $3.9 million for installing slat components that failed quality inspections on 133, 737 jets. The issue, which came to light in June with an FAA airworthiness directive, involves "slat tracks", which are located on the leading edge of 737 wings and guide the movement of slats, says an FAA media release. The FAA says the fine applies only to 737NGs. However, the issue may also have been present on 737 Max, Boeing has previously said. The FAA says Boeing failed to properly oversee suppliers and installed slat tracks that "were weakened by a condition known as hydrogen embrittlement that occurred during the cadmium-titanium plating", the FAA says. "The FAA further alleges that Boeing knowingly submitted aircraft for final FAA airworthiness certification after determining that the parts could not be used due to a failed strength test," it says. FAA documents say supplier Kencoa Aerospace, based in Georgia, provided the slat tracks, and that another company called Southwest United Industries performed the cadmium-titanium plating. Kencoa sent the tracks to Spirit AeroSystems, which eventually shipped the components to Boeing. Southwest United, a division of Washington-based PCC Aerostructures, notified Kencoa in July 2018 that a batch of tracks had failed a quality test, and Kencoa passed that information to Spirit in early August of that year. Spirit then informed Boeing of the problem in September 2018, says the FAA. Before being notified of the issue, Boeing certificated 48 aircraft that may have had affected slats. The company then certificated another 85 potentially affected aircraft after being informed, says the FAA. Boeing has 30 days to respond to the FAA's proposed penalty. The company says it has already inspected and performed required work on all affected 737NGs and that it will address affected 737 Max before those aircraft return to service. "Safety and quality are Boeing’s top priorities, and Boeing has made a number of significant changes to our organisation and processes in recent months that will reinforce and enhance this commitment," Boeing says. Those changes include the creation of a new product safety division and new lines of reporting for engineers. "We are committed to continuing to strengthen our processes to ensure that quality issues in our production system are promptly identified, elevated and resolved," Boeing says. Spirit says it "worked closely with its Boeing customer, regulators and the supplier who procured this part to address the issue. While not a Spirit-made part, we take the safety and quality of everything we provide very seriously". Neither Southwest United nor Kencoa could be reached immediately by FlightGlobal for comment.

Source: FlightGlobal

Hong Kong Airlines (HKA) has vowed to get its finances back in shape and “drive consolidation” within the company, after it escaped further sanction from the territory’s authorities. On 7 December, Hong Kong’s Air Transport Licensing Authority (ATLA) said it was satisfied the beleaguered carrier had met the new licensing requirements for its continued operations. ATLA had earlier instructed the carrier to ensure a satisfactory cash injection and to raise and maintain its cash levels to a level stipulated by the regulator. If it failed to do, it could face being shut down. After its latest round of meetings with the carrier, ATLA says it considers the airline to have met the requirement for cash levels and acknowledges its pledge that this will be maintained. But it adds that it will still be monitoring HKA’s finances closely, and that the airline still needs to submit further details regarding its compliance with the conditions attached to its licence. The carrier says in a statement responding to the authorities’ decision that it will comply with these requirements “as always”. HKA was handed a financial lifeline earlier in the week, in the form of an urgently-drawn-up cash injection plan. No details of how much would go into the carrier, or where the money came from, have been disclosed so far. “Funding for operation will be injected into Hong Kong Airlines by phases,” HKA says in its latest statement. “Moving forward, we will continue to drive consolidation and strengthen our internal structure to operate more efficiently and improve our revenue,” the carrier adds. HKA faced an uncertain future on 2 December, after Hong Kong's authorities, including ATLA and the Civil Aviation Department, issued an ultimatum: to turn around its dire financial situation, or face being wound up by 7 December. The carrier had been plagued by a slew of financial troubles, which led to massive network cuts and unpaid salaries. HKA has already exited the North American market, and is cutting down on frequencies to other Asian points, stating that it will be focusing on "priority routes".

Source: FlightGlobal

South African Airways’ (SAA) board will place the national carrier under business rescue, a significant shift in attitude from earlier statements by the government that it remains open for business. Local media reports indicate that president Cyril Ramaphosa told ministers, deputy ministers and the cabinet secretary in an unofficially circulated letter that SAA will have to go into voluntary business rescue. “This is the only viable route open to the government to avoid an uncontrolled implosion of the national airline,” Ramphosa's letter reads. Meanwhile, the country's cabinet secretary Cassius Lubisi was also quoted as saying: “The voluntary business rescue approach will also prevent liquidation applications by any of SAA’s creditors, which would land the airline in an even worse position.” The decision has not been made public but the department of public enterprises is expected to make an announcement soon. Under Chapter 6 of South Africa’s Companies Act, companies in financial distress may be appointed a business rescue practitioner to manage and restructure the company. The aim is to increase its chances of survival or secure a better return for creditors in the event of liquidation, while offering the company some legal protection during the restructuring process. SAA has received multiple cash injections from the state coffers, widely reported as R57 billion ($3.9 billion) since 1994. Just days ago, the same department said the loss-making airline will undergo extensive restructuring, having run out of alternative strategies. The last straw appears to be strikes in recent weeks, which caused “immense danger” to the carrier’s reputation and operations, and contributed to a deterioration in its financial position, the department added. "SAA is determined to remain open for business," it said then. "Management is also committed to ensure financial sustainability going forward." Cirium fleets data shows that the carrier has 45 aircraft in its in-service fleet, comprising seven Airbus A319s, 10 A320s, 11 A330s, 14 A340s, one A350, and two Boeing 737s. It has six other aircraft in storage – three aged A340s, and three A350s with an average age of less than one year old.

Source: FlightGlobal