Boeing to recognize charge and increased costs in second quarter due to 737 MAX grounding

Boeing has made this announcement on the on-going grounding of the 737 MAX:

Boeing has announced it will recognize an impact to earnings when it releases second quarter 2019 results on July 24.

Boeing will record an after-tax charge of $4.9 billion¹ ($8.74 per share) in connection with an estimate of potential concessions and other considerations to customers for disruptions related to the 737 MAX grounding and associated delivery delays. This charge will result in a $5.6 billion reduction of revenue and pre-tax earnings in the quarter.

While the entire estimated amount will be recognized as a charge in the second quarter, the company expects any potential concessions or other considerations to be provided over a number of years and take various forms of economic value.

Additionally, Boeing’s estimated costs to produce the aircraft in the 737 accounting quantity increased by $1.7 billion in the second quarter, primarily due to higher costs associated with a longer than expected reduction in the production rate. The increased 737 program costs will reduce the margin of the 737 program in the second quarter and in future quarters.

Boeing continues to work with civil aviation authorities to ensure the 737 MAX’s safe return to service, and these authorities will determine the timing of return to service. For purposes of the second-quarter financial results, the company has assumed that regulatory approval of 737 MAX return to service in the U.S. and other jurisdictions begins early in the fourth quarter 2019. This assumption reflects the company’s best estimate at this time, but actual timing of return to service could differ from this estimate. The second-quarter financial results will further assume a gradual increase in the 737 production rate from 42 per month to 57 per month in 2020, and that airplanes produced during the grounding and included within inventory will be delivered over several quarters following return to service. Any changes to these assumptions could result in additional financial impact.

“We remain focused on safely returning the 737 MAX to service,” said Boeing Chairman, President and CEO Dennis Muilenburg. “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.”

Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance and Strategy Greg Smith added, “We are taking appropriate steps to manage our liquidity and increase our balance sheet flexibility the best way possible as we are working through these challenges. Our multi-year efforts on disciplined cash management and maintaining a strong balance sheet, in addition to our strong and broad portfolio offerings, are helping us navigate the current environment.”

Boeing’s previously-issued 2019 financial guidance did not reflect impacts related to the 737 MAX. Due to the uncertainty of the timing and conditions concerning 737 MAX return to service, new guidance will be issued at a future date.

¹= Reflects the tax impact recorded in the second quarter of 2019. Based on current assumptions, additional tax impact would be recorded later in the year bringing the 2019 after-tax charge down to approximately $4.4 billion.

Photo: Joe G. Walker.

TAP Portugal retires its last Airbus A330-300

TAP Portugal – Air Portugal has operated its last Airbus A330-300 revenue flight. The type has been replaced with newer Airbus aircraft.

The pictured Airbus A330-300 CS-TOX operated flight TP22 from Salvador, Brazil to the Lisbon hub on July 12, 2019, arriving the next day in Lisbon.

The fleet is being sold to Air Canada.

TAP aircraft slide show:

Daily Headlines – July 18, 2019

Airline news from other sources:

How the Boeing 737 Max groundings made Swoop’s operational problems even worse

Judge Orders Mechanics Unions At American To Fine Their Members If They Cause Further Flight Disruptions

American adds Dallas/Ft. Worth – Ecuador service from December 2019

Are Cellphones a Flight Danger? They Are on These Boeing Jets

Qatar Airways to launch direct flights to Gaborone, Botswana from October 27, 2019

Qatar Airways is pleased to announce the launch of its new service to Gaborone, Botswana, starting October 27, 2019. The capital and largest city of Botswana will be the airline’s first destination in the African country.

The three-times weekly flights will be operated by an Airbus A350-900 aircraft, featuring 36 seats in Business Class and 247 seats in Economy Class.

Gaborone is the capital and the largest city in Botswana, a landlocked country in Southern Africa, bounded by Namibia, Zambia, Zimbabwe and South Africa. The nation’s vast nature and wildlife have made it a renowned destination for adventurous tourists from across the globe.

Flight schedule

(Sunday, Wednesday, Friday)

Doha-Johannesburg
QR1377: Departs DOH 06:55hrs, Arrives JNB 14:50hrs

Johannesburg-Gaborone
QR1377: Departs JNB 15:55hrs, Arrives GBE 16:50hrs

Gaborone-Johannesburg
QR1378: Departs GBE 18:35hrs, Arrives JNB 19:30hrs

Johannesburg-Doha
QR1378: Departs JNB 20:40hrs, Arrives DOH 06:35hrs+1

EVA Air to add Milan Malpensa

EVA Air has made this announcement:

With flights scheduled to commence on February 18, 2020, EVA Air will begin a four times weekly service from Taipei Taoyuan to Milan Malpensa (MXP) next year. The 316-seat 777-300 operated service will become the carrier’s only sector to Italy, and just the fifth destination it flies to in Europe adding to its existing routes to Amsterdam, London Heathrow, Paris CDG and Vienna. MXP will become the third direct station in Europe, with other cities (London and Amsterdam) only being served via Bangkok, and it is the first route to be opened by the carrier in Europe in the last 20 years.

The Star Alliance carrier, which flew more than 12.5 million passengers in 2018, currently flies to 65 global destinations, including 11 in North America and 50 in Asia and Oceania. EVA Air is one of just eight carriers in the world rated as a ‘Five-Star Airline’ by international quality ratings organisation SkyTrax, and becomes the fifth of those eight airlines to serve MXP. It was also rated amongst the world’s Top 10 Airlines of 2019, as voted for by global travellers, and is the seventh of those ten carriers to fly to Malpensa. It has received this accolade for four years in a row.

EVA Air Boeing 777-300ER photographed on October 31, 2015 from Clay Lacy Astrovision Learjet.

The importance of the airline’s hub in Taipei, and the potential for onward connections, will also benefit the new route. “We expect many travellers on the route to fly point-to-point between Taipei and Milan, but we also anticipate significant volumes of passengers and cargo transfer traffic on EVA Air’s network of 31 points in Asia, 18 in China and Brisbane in Australia,” states Tucci. More than 70% of Milan’s traffic to Asia currently flies via a long-haul gateway.

Operated year-round, EVA Air will fly the 9,640-kilometre sector on days 1,2,4 and 6 from its hub at Taipei Taoyuan, and will leave Milan on Tuesdays, Wednesdays, Fridays and Sundays given the overnight service from Asia. Flight BR71 departs Taiwan at 23:40 and arrive at MXP at 07:15 the next day. Leaving Malpensa at 11:50, BR72 lands in Taipei at 06:30 the following day.

The Taipei Taoyuan hub becomes the 18^th Asian gateway flown from MXP and EVA Air the 14^th airline with flights to the region. The new flights to Taiwan join existing operations to Azerbaijan (Azerbaijan Airlines), China (Air China, Neos), Georgia (Wizz Air), Hong Kong (Cathay Pacific Airways), India (Air India), Japan (Alitalia), Korea (Korean Air), Maldives (Air Italy, Alitalia, Neos), Pakistan (Pakistan International Airlines), Singapore (Singapore Airlines), Thailand (Thai Airways) and Uzbekistan (Uzbekistan Airways). “Asia is market that is growing by 17% year-on-year for MXP, thanks to the investment in capacity by our 13 serving airlines and their collective strategy to improve the quality of Milan’s network by moving beyond traffic closer to its final destination,” concludes Tucci.

Top Copyright Photo: EVA Air Boeing 777-35E ER B-16713 (msn 33756) LAX (Michael B. Ing). Image: 947035.

EVA Air aircraft slide show:

American Airlines and Japan Airlines to add direct flights between Tokyo and Las Vegas in support of CES 2020

American Airlines and Pacific Joint Business partner Japan Airlines (JAL) for the second year are adding direct flights between Tokyo (NRT) and Las Vegas (LAS) to support the high demand for CES® 2020. American is also adding nonstop flights from Austin, Texas (AUS), and San Jose, California (SJC), and upgauging existing flights from Philadelphia (PHL) and Dallas-Fort Worth (DFW) to LAS surrounding the main event, which runs January 4–12, 2020.

Tokyo demand

“As CES continues to grow each year, we will continue to deliver on our promise to strengthen the value of our global network,” said Vasu Raja, American’s Vice President of Network and Schedule Planning.

This will be the second year that American is providing direct access to LAS from NRT in support of CES. The flight will be operated on a Boeing 777-200 aircraft, featuring 36 fully lie-flat, all-aisle access Flagship Business seats that provide customers access to The Club at LAS to freshen up upon arrival or relax before departing.

Flight times between NRT and LAS will provide a seamless connection onto JAL’s network to and from Southeast Asia, including Singapore; Bangkok; Jakarta, Indonesia; and Manila, Philippines.

Domestic demand

American is also adding direct flights from major tech cities Austin and San Jose for the first time, offering additional service to fly next-generation innovators to the conference. Both flights will be operated on a Boeing 737-800 with optimal schedules and convenience for CES attendees.

“Whether it’s customers taking advantage of the direct flight from Austin or connecting on a lie-flat product all the way from South America to Las Vegas, we want to make sure the world’s best innovators have options on the world’s largest carrier,” Raja said.

In addition to the new direct service in January, two flights from American’s hubs — PHL and DFW — will be upgauged to an Airbus A330 and a 777-200, respectively, for an 18% increase in seats domestically. As American’s largest trans-Atlantic hub, PHL will provide more seats for customers connecting from Europe.

Tickets will be available for purchase on July 22.

New Service to LAS (all times are local):

Direct service:

Flight Number	Depart	Arrive	First Departure	Last Departure	Departure Time	Arrival Time	Operating days	Aircraft
AA186	NRT	LAS	Jan. 4	Jan. 12	6:20 p.m.	11:35 a.m.	Mon., Wed., Thur., Sat.	777-200
AA187	LAS	NRT	Jan. 4	Jan. 12	11:15 a.m.	4:15 p.m. (next day)	Mon., Wed., Sat.	777-200

Flight Number	Depart	Arrive	First Departure	Last Departure	Departure Time	Arrival Time	Operating days	Aircraft
AA186	NRT	LAS	Jan. 4	Jan. 12	6:05 p.m.	11:20 a.m.	Tues., Fri., Sun.	777-200
AA187	LAS	NRT	Jan. 4	Jan. 12	10:30 a.m.	3:30 p.m. (next day)	Tues., Thurs., Fri., Sun	777-200

Flight Number	Depart	Arrive	First Departure	Last Departure	Departure Time	Arrival Time	Aircraft
AA1465	SJC	LAS	Jan. 6	Jan. 6	2:13 p.m.	3:43 p.m.	737-800
AA1465	LAS	SJC	Jan. 10	Jan. 10	6:55 p.m.	8:25 p.m.	737-800

Flight Number	Depart	Arrive	First Departure	Last Departure	Departure Time	Arrival Time	Aircraft
AA1534	AUS	LAS	Jan. 6	Jan. 6	5:30 p.m.	6:40 p.m.	737-800
AA1534	LAS	AUS	Jan. 10	Jan. 10	5:25 p.m.	10:10 p.m.	737-800

Upgauged service:

Flight Number	Depart	Arrive	First Departure	Last Departure	Departure Time	Arrival Time	Aircraft
AA589	PHL	LAS	Jan. 4	Jan. 6	5:50 p.m.	8:18 p.m.	A330
AA749	LAS	PHL	Jan. 9	Jan. 11	8:05 a.m.	3:53 p.m.	A330

Flight Number	Depart	Arrive	First Departure	Last Departure	Departure Time	Arrival Time	Aircraft
AA2238	DFW	LAS	Jan. 4	Jan. 12	7:10 a.m.	8 a.m.	777-200
AA749	LAS	DFW	Jan. 4	Jan. 12	2 p.m.	6:50 p.m.	777-200

Top Copyright Photo: American Airlines Boeing 777-223 ER N774AN (msn 29581) LAX (Michael B. Ing). Image: 947034.

American Airlines aircraft slide show:

Boeing dedicates $50 million of pledged $100 million to near-term relief for families of the victims of the Lion Air flight 610 and Ethiopian Airlines flight 302 accidents

Boeing has made this announcement:

Boeing has announced that it has dedicated $50 million of a previously announced $100 million fund to provide near-term financial assistance to families of the victims of the Lion Air Flight 610 and Ethiopian Flight 302 accidents.

Boeing also announced that it has retained Kenneth Feinberg and Camille Biros, renowned experts in establishing and overseeing victims’ compensation funds, to design and administer the fund.

“The tragic loss of life in both accidents continues to weigh heavily on all of us at Boeing, and we have the utmost sympathy for the loved ones of those on board,” said Dennis Muilenburg, Boeing chairman, president and CEO. “Through our partnership with Feinberg and Biros, we hope affected families receive needed assistance as quickly and efficiently as possible.”

The $50 million fund represents the initial expenditure of a $100 million pledge by Boeing to address family and community needs of those affected by the accidents. All monies distributed by Mr. Feinberg and Ms. Biros will be independent from any resolution provided through the legal process.

“We are honored to take on this important assignment of providing needed financial relief to the families of these two tragedies,” added Kenneth Feinberg.

Co-Administrator Camille Biros continued, “We know how important it is to assist the families of the victims who have endured a personal tragedy and will work to design and administer the fund and distribute the money as efficiently and expeditiously as possible.”

Note: Meanwhile all of the Boeing 737 MAX airplanes in the world remain grounded and out of service.

Air Canada introduces winter service from Quebec City to Cancun, Mexico and Punta Cana, Dominican Republic

Air Canada today announced two new winter services from Quebec City (YQB) to popular sun destinations Cancun, Mexico and Punta Cana, Dominican Republic. Service to Cancun begins December 21, 2019 until April 11, 2020, while Punta Cana flights start December 22, 2019 until April 12, 2020.

The flights will be operated on a 200-seat all-economy Air Canada Rouge Airbus A321.

Flight	Departs	Arrives	Days of Week
AC1776	Quebec City 08:00	Cancun 13:00	Saturday
AC1777	Cancun 14:00	Quebec City 18:30	Saturday
AC1772	Quebec City 08:20	Punta Cana 13:50	Sunday
AC1773	Punta Cana 14:50	Quebec City 18:30	Sunday

This announcement represents the first expansion of Air Canada’s leisure travel offerings since the announcement of its exclusive agreement to pursue a combination with Transat A.T. The transaction, if completed, is expected to facilitate continued growth and expansion in the highly competitive, global leisure travel segment.

Air Canada in Quebec City

Including these two new routes, Air Canada will offer close to 1.2 million seats in the Quebec City market in 2019. Air Canada, Air Canada Rouge and its regional airline partners flying under the Air Canada Express banner operate approximately 275 flights per week between Quebec and Montreal, Sept-Iles, Gaspe, Toronto and Ottawa.

Top Copyright Photo: Air Canada rouge (Air Canada) Airbus A321-211 WL C-FJOU (msn 6873) FLL (Tony Storck). Image: 930981.

Air Canada Rouge aircraft slide show:

Daily Headlines – July 17, 2019

Airline news from other sources:

WAB air Applies for Operating Licence

Montenegro Airlines ends plastic cup use

Boeing and Southwest Airlines conspired to hide flaws in the 737 MAX jet, lawsuit alleges

Pakistan reopens airspace five months after standoff with India

Sunwing announces the return of twice-weekly flights from Montreal to Havana and also Moncton – Miami

Sunwing has announced it is offering a direct flight service twice a week on Mondays and Fridays from Montreal to Havana, from December 13, 2019 until March 13, 2020.

Celebrating its 500th anniversary this year, the capital city of Cuba, Havana has a rich history and fascinating heritage to uncover. Visitors will feel like they’ve travelled back in time as they stroll along the cobblestone streets of Old Havana, lined with picturesque Baroque architecture and classic American cars. Travellers can even follow in the footsteps of famous author Ernest Hemingway, who called the city home for over 20 years, by discovering some of his favourite old haunts on a Sunwing Experiences excursion.

In other news, the company has also announced it plans to fly direct to Miami from Moncton this winter. A new destination added by Sunwing for this coming season, travellers can experience all that this premier beach and nightlife destination has to offer with convenient weekly Saturday departures from February 8, 2020 until May 2, 2020 inclusive.

The first carrier to offer a direct flight service to Miami from Greater Moncton, Sunwing is expected to be the only airline offering this route for the coming season. With the addition of Miami, sunseekers departing from Greater Moncton now have six of the tour operator’s most popular southern destinations available on their doorstep including Puerto Plata and Punta Cana in the Dominican Republic, Montego Bay in Jamaica, Cancun, Mexico and Varadero, Cuba.