The announcement came on the same day that Boeing informed 6,770 workers that they were losing their jobs. Another 5,520 workers accepted voluntary purchase offers.
Boeing had continued to build the Max, its best-selling jet, even after it was grounded in March 2019 following two fatal accidents that killed 346 people. He produced more than 400 of the jets he was unable to deliver before stopping production in January due to the constant delays in obtaining approval for his flight.
The airline temporarily suspended construction of the plane in January, before the Covid-19 pandemic hit most airlines in the world. He could not afford to continue building the Max without being able to deliver the planes and complete sales. But if he kept the line closed, he risked the loss of suppliers who could close the business without being able to sell their parts to Boeing.
“Without the supply chain, there will be nothing to assemble, so it’s just as simple,” said Boeing CEO Dave Calhoun at the April annual meeting, discussing the need to support the company’s suppliers.
Since the start of the Covid-19 pandemic that caused the collapse of air travel, airlines and aircraft leasing companies have canceled orders for 299 of the 737 Max. Another 240 of the jets have had their order status changed and Boeing no longer counts them as firm orders.
The company still has firm orders for over 3,800 of the 737 Max’s in its books. And some of the airlines that rejected jet delivery due to the number of planes they parked say they hope to receive the 737 Max soon.
“We still want to restore Max’s service,” Southwest CEO Gary Kelly told shareholders at the company’s annual meeting earlier this month. “The Max plane is above the [older versions of the] 737 that we are currently operating. Burn less fuel. It is an excellent airplane. And certainly in this environment, we would like to retire some of our older planes, avoid expensive maintenance and a replacement with new planes. “
Southwest owns 34 of the jets on the ground, more than any other airline, and Boeing has built another 25 that it is waiting to deliver. In any case, southwest (LUV)
has reached an agreement with Boeing to reduce the number of Max jets it will add to its fleet by the end of 2021.
Southwest originally planned to ship 107 737 Boeing Max jets between 2019 and 2021 and another 19 from aircraft leasing companies. But so far it has received only three of those planes due to grounding. Under an agreement with Boeing, it will now take delivery of no more than 48 of these jets by the end of 2021 and will postpone orders for at least 59 others.
“We don’t need the Max right now. We don’t need all the planes we have,” Kelly told investors in April, reporting the airline’s first quarterly operating loss in 11 years.
The airline said last month that it does not plan to use those planes on the ground before November, and could further push the use of the planes further.
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