Listen: US, Boeing And President Trump discussed on FT News
"Order of prohibition to ground all flights of the seven thirty seven. Max eighth. Andy, seven thirty seven max nine and planes associated with that line. I've spoken to Elaine Chao secretary of transportation to Sylvia, we just heard Donald Trump making his announcement about the grounding of Boeing's seven three seven max in US airspace on Wednesday. Can you take us through the timeline of events Pap starting with when the max eight I went into service. Yes, sir. The Mike Sade is a variant of the seven three seven aircraft that Boeing launch of the nineteen sixties. It was one what has been one of those best selling aircraft. The Maxine I launched in twenty seventeen. What happened last year in October that line and Indonesia airline crashed shortly after takeoff and killed all hundred and eighty nine people on board. Now, what's happened? This week is our on Sunday. An Ezio piano lines crashed also killing everybody on board. That event has now triggered a worldwide ban of the aircraft. Starting with the Chinese and ending with the Americans yesterday. So air crashes, unfortunately, do just happen. But from what we know so far what are the similarities between these two crushes that are getting thirties. Concerned just a stress we don't know anything definitive. The black boxes are still being examined by the accident. Investigators with what we do know is that both accidents took place in the same phase of flight shortly after takeoff and pilots on the GOP and airlines reported flight control problems, which was the same case with liner back in October. So there's been a lot of debates around the aircraft's automated stall prevention features, she's caught the MCAS after the lion. At crushed some pilots in the US complain they'd been unaware of this feature. What exactly their concerns and how long have they been kicking around for these concerns? I surfaced off of the line aircrash October where a lot of pilots in the US. So that they wanna wear of the feature at hadn't been in any of their training manuals or hadn't been explicitly specified. In the training manuals. Some of them were saying earlier this week that now that they know exists, and they know how to deal with it. And specifically how to counteract it if it does take effect? Some of the were saying to me they thought this aircraft was still safe to fly. Right. So what would you say what would people in the industry say about the way the management of Boeing has handled this crisis? I think there are mixed opinions out there. I think it's a waste difficult to react in these sorts of circumstances. But their reputations definitely on the line and some suggest that burn should've acted immediately. After the crash on Sunday. They should have come out and said, we're banning this aircraft. They have not been to crushes in less than six months. We don't really know what the causes yet of the second one will ban the aircraft and others of sort of made the point that Boeing should've waited for the US regulated to come out and burn them. Which is what happened yesterday is a bit of a mixed view out there, but equally it doesn't look good for bearing in terms of reputation in the moment. No. And its share prices of taken a hit the rating agency Fitch worn. That the crisis could become a systemic issue with lengthy groundings delivery delays in order cancellations. What is the potential scale of the damage to Boeing nobody's really putting a number on it at the moment. I mean, the shares as you say they've tanked or they dropped steeply. They lost about twenty six billion dollars worth in terms of market cap. Nobody has yet cancelled an order for the seven three seven eight, but the entire family, and there are four variance is a very big of for Boeing. It's wrapped up around five thousand order so far worth around six hundred billion dollars. So it's a big earner, you know, big potential hit it speaking of hits. Josh, what are the losses that international airlines that have offered them at seven three seven, you know, what's the impact on them? So those that have them in service already will be facing costs on several fronts. We've had one definitive figure quite clear figure from to the traveler Prater, which has an airliner has five max aids, which is grounded may said is going to cost three. Million euros a week likely. So we know that that six hundred thousand euros per aircraft. That's quite a lot of money. But what that consists of is various things. So a lot of airlines don't own their aircraft. They lease them. And you have to pay rent we have to pay a lease fee. Even if you're not using it. So your paying the FIBA you're not getting any cash in you, go to pay your staff because they call it necessarily transfer from one type of aircraft another you have to pay parking fees is expensive enough to park a car in London Commissioner tried to park and aircraft at Heathrow or ever. And then of course, the passengers you have to reroute them, you might have to put them onto other services. You might be liable for compensation under certain European schemes. So all of these costs mount up and one consultancy has estimated that they think it will cost one hundred fifty thousand dollars a day per craft grounded. Now, there are lots of variables in there. And we have yet see, but clearly the longer these planes are grounded the more. It's gonna cost not that people's holiday plans in a survey of the most important thing in these sorts of circumstance. Mises, but what is the impact on the travel industry and how much disruption as this like to cause unwed? Do we know? There's ever a good time for a crash, but the fact that it happened now in the winter scheduled was the tail end of the winter schedule means that there are fewer planes flying. So there was a bit more spec passively. So if an airline can't use the for Norwegian, for example, can't use it smacks eight so it substituting on some of its roots at seventy seven Dreamliner so that will take some of the strain. But it depends how long this goes on for because if this carries on into the summer schedule, which actually starts at the end of the month when planes when flights ramp-up, then he could find it very pressing. There are other places they can get planes from they can wet lease them as it's called from third parties, which supply them with the planes and with the crew, hence, the wet leasing dry leasing is without the crew those are expensive, and of course, competition for those if all of these planes are grounded means that the prices of those will undoubtedly go up so it could be hugely expensive for them on several fronts and said just doing know who the main customers hair, and where will the buck stop is it the airlines that will end up taking. These will bowing to help them in some way burning. I think ultimately is going to have to help them. But the question is how long does that help take come? Is there a legal case of their contractual wranglings have to happen? I so we know that some of the biggest airlines with ovarian with the biggest orders, I think American United southwest. Norwegian have a tenth of their fleet at the moment. But they also have that eighteen, but they also have ninety two on order now Ryanair's interesting 'cause they have one hundred thirty five on order due to start arriving fairly soon. Ryan has big expansion plans over the next few years is it going to be able to keep up with those in the short term if it has all of these planes. There are some airlines which have very strong balance sheets, and we'll be absolutely fine. They can take the hit because they know they'll get it back. It might look pretty in the short term. There are other airlines not naming any that will find it much harder to sustain this kind of loss on a consistent basis. Finally, sylvia. We know that Donald Trump's budget this week proposed a cut to the Federal Aviation Administration. Inspired. Of the fact that is air traffic control system remains years behind many of his counterparts. What's more the FAA lacks chief after Mr. Trump failed to get approval for his own nominee? What kind of pressure is the FAA under the FAA's definitely under the microscope at the moment. Lot of people saying it was too slow to act notably. The Chinese regulator was the first one on Monday to ban the Akra from his own space quickly follow other countries around the world. And then e so the European regulator on Tuesday, some people saying the agency's understaffed underfunded others are saying that the FAA was right to wait to get some sort of evidence on the cause of the second crash. There has been some mentioned of new satellite imagery, those come out, which might have been one of the reasons why the FAA together with President Trump on Wednesday decided to ground the aircraft in the states. Those people as supporters of the FAA's that are saying it was right that the agency didn't bow to political pressure. That had been building up in washing since the Europeans bound the. Craft not to act into to wait for the facts. Having said that we still don't really know why the aircraft crashed. But we hand say is that the prestige of the eight hundred fifty billion dollar aviation industry in the US has definitely taken a hit this week."