WestJet faces indefinite delays on dozens of new aircraft deliveries after a panel blowout on a Boeing 737 Max plane last month prompted a halt to greater production at the U.S. aircraft maker.
The Calgary-based carrier bought 42 Boeing 737 Max 10 jetliners in 2022, with options for 22 more B次元官网网址� on top of nearly two dozen earlier Max orders still in the pipeline.
The multibillion-dollar deals were slated to bolster WestJetB次元官网网址檚 fleet by at least 65 planes B次元官网网址� 50 of them Max 10s B次元官网网址� by 2029 in a move the airline called a B次元官网网址済ame-changerB次元官网网址� that would reduce fuel costs and B次元官网网址渦nderpinB次元官网网址� its growth.
However, the Max 10 has yet to receive final certification and, after the panel emergency, U.S. regulators said they would halt production expansion at Boeing until safety concerns were sufficiently addressed.
The Federal Aviation Administration grounded all 737 Max 9s for inspection and launched a probe after a panel known as a door plug tore away from the fuselage of an Alaska Airlines plane while in flight on Jan. 5, leaving a refrigerator-sized hole in the cabin wall and prompting an emergency landing.
As of Feb. 5, 94 per cent of the 144 Max 9s flown by United Airlines and Alaska Airlines B次元官网网址� two-thirds of all Max 9s in operation globally B次元官网网址� had been cleared to return to service, according to the FAA.
WestJet said it could handle the production turbulence.
B次元官网网址淲e continue to work closely with Boeing on all aspects of aircraft delivery and timelines. We believe our order book and fleet planning have the built-in flexibility to support WestJetB次元官网网址檚 growth plans,B次元官网网址� spokeswoman Madison Kruger said in an email.
The Max 10 is the largest plane in the latest line of 737s and offers 20 per cent fewer carbon emissions per passenger than the previous generation. Fleet rejuvenation is essential to ensuring efficiency, bringing down costs B次元官网网址� jet fuel and labour are airlinesB次元官网网址� two biggest expenses B次元官网网址� and showing a commitment to green targets.
B次元官网网址淭he ability of WestJet to do that is compromised by Boeing,B次元官网网址� said John Gradek, who teaches aviation management at McGill University.
B次元官网网址淭he older the fleet becomes, the more expensive and the less efficient it becomes,B次元官网网址� he said.
B次元官网网址淚f that airplane isnB次元官网网址檛 going to see the light of day for years B次元官网网址� if ever B次元官网网址� because of whatB次元官网网址檚 going on, the plans that WestJet has for fleet renewal are going to be in jeopardy.B次元官网网址�
The 65 new aircraft ordered by WestJet amount to nearly 40 per cent of its current fleet, according to Airfleets.net. Many of them would likely replace some of the 88 airliners from the previous generation of 737 planes over time.
The list price of the 42 Max 10s ordered in 2022 totalled $7.6 billion, though large purchases typically come with major discounts.
At the time, both Boeing and WestJet stressed the importance of the deal.
B次元官网网址淭he 737-10 will be a game changer, with one of the lowest costs per seat among mid-range aircraft. This will foster our low-cost positioning and affordability for Canadians,B次元官网网址� said Stan Deal, who heads BoeingB次元官网网址檚 commercial airlines division, in a September 2022 statement.
WestJet said then that the planes would B次元官网网址渟trengthen the airlineB次元官网网址檚 presence in Western Canada and underpin growth in transcontinental and leisure offeringsB次元官网网址� from Eastern Canada.
The carrier faces challenges beyond delivery delays. A pair of no-frills airlines based in Alberta B次元官网网址� Flair Airlines and Lynx Air B次元官网网址� continue to compete with WestJet, following its wind-down of budget subsidiary Swoop in October. A new collective agreement with pilots has also raised labour costs for CanadaB次元官网网址檚 second-largest carrier, all as battles for a bigger share of domestic and sunshine destination traffic drag on.
Other Boeing partners are likely to feel the impact of the FAAB次元官网网址檚 order, which caps 737 production at 38 per month until the regulator is B次元官网网址渟atisfied that the quality control issuesB次元官网网址� are resolved. Boeing had initially planned to hike production to 42 per month in 2024.
B次元官网网址淭he long-term implications of the grounding are potential delivery delays and a further push-out of the Max-10 certification,B次元官网网址� wrote analyst Savanthi Syth of Raymond James in a note to investors on Jan. 31.
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