ARC NEWS
Chinese carriers ask Boeing for 737 Max compensation
May 23, 2019
The three largest Chinese airlines have formally asked for compensation from Boeing over the grounding of the 737 Max aircraft. Air China has 16, 737 Max 8's in storage, and has another four aircraft on order. CCTV reported that both carriers have also filed compensation claims with Boeing over the Max grounding. China Southern has 24, 737 Max 8 aircraft, with another 35 on order. China Eastern does not operate any 737 Max aircraft, but its China Eastern Yunnan subsidiary has four in storage, and its Shanghai Airlines subsidiary has 11 in storage. The Chinese carriers have joined other carriers such as Turkish Airlines and Flydubai in seeking out compensation from Boeing. On the 21st of May, Turkish Airlines chairman Ilker Ayci said that “compensation is on the table” in its discussions with Boeing.
Boeing has advised that it does not comment on its customer discussions.







US airlines sees record summer travel despite 737 Max grounding
May 22, 2019
Airlines for America predicts a whopping record 257.4 million passengers will fly on US airlines between the 1st of June and 31st of August while the Boeing 737 Max remains grounded. The MAX grounding took 200 daily flights out of service for the summer travel season. The group estimates the grounding results in a loss of 35,000 daily seats for the summer travel season. Airlines with 737 Max aircraft in storage are keeping passengers flying by rerouting flights and “lightly traveled routes” have been suspended, said US airlines chief economist John Heimlich on the 21st of May. If there is a prolonged grounding into late 2019 then airlines may pursue “deferring retirement of aircraft and acquiring used aircraft on the marketplace if needed”, Heimlich says.


American yet to realise US Airways merger benefits
May 22, 2019
American Airlines may have yet to realise the array of revenue benefits of its 2013 merger with US Airways, suggests Moody's Investors Service in a new report. "American's inferior operating margins imply that the company has yet to capture the operating benefits of the 2013 merger with US Airways," the rating agency said in a credit opinion on the 21st May. Moody's expects the Fort Worth, Texas-based carrier's operating margin to lag peers Delta Air Lines and United Airlines by at least 350 basis points in 2019, it says. It cites American's significantly smaller international network – it only represented roughly 27% of revenues in 2018, compared to around half at its competitors – among reasons for this discrepancy. American's pre-tax operating margin was 2.3% for the first quarter, its financial statements show. Delta reported a pre-tax operating margin of 9% and United 3.8%.


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