WestJet extends suspension of Max 8; airline seeking compensation from Boeing

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WestJet Airlines has extended its route suspensions related to the grounding of Boeing’s Max 8 aircraft and is seeking compensation from the aircraft manufacturer for lost revenue.

Amanda Stephenson, Calgary Herald July 29, 2019

WestJet Airlines has extended its route suspensions related to the grounding of Boeing’s Max 8 aircraft and is seeking compensation from the aircraft manufacturer for lost revenue.

The Calgary-based airline, which owns 13 Max 8 planes for a total of seven per cent of its fleet, announced Monday it is now scheduling without the aircraft until at least Nov. 4, as opposed to the previously stated Aug. 29. Affected routes include Halifax-Paris, Vancouver-Regina, Toronto-Kelowna and Toronto-St.John’s.

WestJet is just one of many airlines around the world that has been forced to re-accommodate guests and adjust its summer flying schedule in the absence of the Max 8, which has been grounded globally since March following two fatal crashes.

In an interview Friday, WestJet CEO Ed Sims said while the airline has no intention of flying the plane again until it is “100 per cent safe to do so,” the grounding is lasting longer than anticipated after U.S. officials identified another flaw with the plane’s software in June.

“It’s up to the regulators now to drive that pace,” Sims said. “But I’d be kidding if I said I wasn’t anything other than anxious to get that aircraft back up in the air.”

WestJet CEO Ed Sims stands in the cabin of a new Boeing 737 Max 8 in WestJet’s Calgary hanger on Thursday December 6, 2018. GAVIN YOUNG / POSTMEDIA

According to WestJet, the airline had 9,225 Max flights planned since the grounding and has been able to cover off almost 6,000 of them with other aircraft from its fleet. Including all aircraft types, WestJet has been able to maintain 98 per cent of its planned departures since March.

Still, the shortage of aircraft has meant WestJet is flying very full planes and has little flexibility in cases of weather delays or unexpected maintenance. WestJet’s ultra-low-cost carrier Swoop, which typically can borrow aircraft from its parent company in the event its own planes are undergoing maintenance, has been plagued with cancellations this summer since there is no spare capacity to be had.

On Friday, Sims said WestJet is seeking compensation for that lost capacity, though he did not provide details on what form that compensation might take.

“We have been having multiple and significant conversations along those lines. Where those conversations will lead to will remain privy between ourselves and Boeing,” Sims said. “But clearly we are one of two Boeing-exclusive jet fleets in North America and we expect that to be reflected in the conversation we have with Boeing.”

Other airlines around the world, including China’s three largest airlinesSouthwest Airlines and Ryanair, are also seeking compensation from Boeing for cancelled Max 8 flights. Boeing said earlier this month it will take an after-tax charge of $4.9 billion U.S. as a result of “potential concessions and other considerations to customers” related to the grounding and associated delivery delays. While the entire estimated amount will be recognized as a charge in the second quarter, Boeing said the actual payouts will  be provided over a number of years and take “various forms of economic value.”

“We remain focused on safely returning the 737 MAX to service,” said Boeing Chairman, President and CEO Dennis Muilenburg, in a release. “This is a defining moment for Boeing. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes. The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks.”