Ethiopian Airlines crash: Will second Boeing 737 MAX 8 disaster lead to more aircraft groundings in India?
While Jet Airways has already grounded its 5 aircraft based on instructions from lessors, the airline could be eligible for compensation from Boeing for the grounding.
If the groundings have to happen anytime soon, it could suck out capacity from the Indian market which is already battling high fares
Preliminary reports of Lion Air crash last year indicated that pilots struggled to control the plane because of an internal malfunction
Spicejet has not returned many of their B737NG aircraft but has gone for selective expansion
The crash of Ethiopian Airlines' jet on Sunday marked the second hull loss of the Boeing 737 MAX 8 aircraft and it came within months of the first. As Ethiopian Airlines broke the news of the crash near Addis Ababa, people could not stop but compare it to the first near Jakarta involving Lion Air flight. While it is too early to speculate on the reasons behind the crash, the profile of both is similar. Early reports indicate that pilots wanted to return back to the airfield in both cases. When the Lion Air crash investigation is complete, one would know better on the exact similarities, if any.
The crash had an immediate fallout in China. The country has grounded its entire fleet of B737 MAX aircraft. This grounding involves close to 100 aircraft operated by seven Chinese carriers. This blanket grounding in one of the largest markets in the world has put a question mark on the latest and best-selling product of Seattle based Boeing.
While the Chinese have grounded the aircraft in what is being considered as a bigger ploy of trade negotiation in addition to passenger safety, the Indian regulator Directorate General of Civil Aviation (DGCA) has reached out to Boeing and FAA (Federal Aviation Administration) for more data on the Boeing 737 MAX 8 and its safety.
Two carriers in India, Jet Airways and Spicejet operate the B737MAX8 and have a large order book of the plane. Jet Airways has so far taken delivery of 5 Boeing 737 MAX 8 and further deliveries have been put on hold due to the ongoing financial issues. While Spicejet has taken delivery of 13 aircraft which now form 27 percent of its B737 fleet which comprises of 35 B737-700/800/900 and 13 B737MAX8. The airline also operates 26 Bombardier Q400 turboprops.
This time around it is unclear if the manufacturer will go for the grounding of planes or will global regulatory bodies look at grounding it till Boeing comes up with a fix. Preliminary reports of Lion Air crash have indicated that pilots struggled to control the plane because of an internal malfunction and the manufacturer had not informed the customers about such a change.
The issues came to the fore in such a way that Lion Air has threatened to cancel its order of the B737MAX series and work with rival Airbus for its fleet replanned, it could be looked at two different ways for Jet Airways and Spicejet. While Jet Airways has already grounded its 5 aircraft based on instructions from lessors, the airline could be eligible for compensation from Boeing for the grounding.
With its default, if the lessor would get the compensation or the airline will be keenly watched. But with the aircraft still on the records of Jet Airways, the airline can surely claim it. With flights already curtailed, there isn't much that the airline will be hurt at. Spicejet, on the other hand, is a different issue. The airline operates 13 of this type and all are operational aircraft, except the one which the airline received recently - which is undergoing registration formalities.
While Spicejet would certainly get compensated, the airline could have to scale back its expansion plan and also cancel some of its flights. Spicejet has not returned many of their B737NG aircraft but has gone for selective expansion. The airline stopped wet lease operations after it received the B737MAX8.
Regulators and airlines alike never want unsafe operations, so the thumb rule for aviation has been "if it's flying, it's safe". Past and present issues of the B787 Dreamliner have seen groundings - a blanket or partial and thus it is safe to assume that the B737MAX8 is considered safe to fly thus far. But if the groundings have to happen anytime soon, it could suck out capacity from the Indian market which is already battling high fares due to an on-going capacity reduction of around 2 percent by IndiGo for pilot issues and 40+ planes being grounded by Jet Airways for funding issue.
This will drive up the costs for customers since frequencies on some sectors and at times flights on few sectors may have to be completely withdrawn for lack of aircraft. The increased fares have already led to slowing down of growth in January and a further increase would hamper this more in what is termed as worlds fastest growing aviation market.
While IndiGo and GoAir have grappled from emergency landings due to engine problems on its Pratt & Whitney powered A320neos but not seen any groundings due to safety issues, a crash is serious and both of them have been fatal for the B737MAX8 putting a bigger question mark on safe operations. As regulators worldwide look at ways to have safe operations, all eyes will be what the DGCA decides in the next couple of days.
The author is the founder of networkthoughts.com, a blog on aviation
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