Tag Archives: Boeing 737-8 MAX 8

Boeing statement on MAX 8 Operations Manual Bulletin

Delivered August 13, 2018, crashed into the Java Sea on October 29, 2018

Boeing issued this statement:

Boeing is providing support and technical assistance to the Indonesian National Transportation Safety Committee and other government authorities responsible for the investigation into Lion Air flight 610.

 

The Indonesian National Transportation Safety Committee has indicated that Lion Air flight 610 experienced erroneous input from one of its AOA (Angle of Attack) sensors. 

 

Whenever appropriate, Boeing, as part of its usual processes, issues bulletins or makes recommendations regarding the operation of its aircraft. 

 

On November 6, 2018, Boeing issued an Operations Manual Bulletin (OMB) directing operators to existing flight crew procedures to address circumstances where there is erroneous input from an AOA sensor. 

 

The investigation into Lion Air flight 610 is ongoing and Boeing continues to cooperate fully and provide technical assistance at the request and under the direction of government authorities investigating the accident.

Top Copyright Photo: Lion Air (PT Lion Mentari Airlines) Boeing 737-8 MAX 8 PK-LQP (msn 43000) BFI (James Helbock). Image: 944190.

Lion Air aircraft slide show:

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WestJet reports third quarter net earnings of $45.9 million, will fly from St. John’s to Ft. Lauderdale/Hollywood

Delivered on July 19, 2018

WestJet today announced its third quarter results for 2018, with net earnings of $45.9 million, or $0.40 per fully diluted share. This result compares with net earnings of $135.9 million, or $1.15 per fully diluted share reported in the third quarter of 2017. Year-to-date, WestJet recorded net earnings of $62.3 million, or $0.54 per fully diluted share.

“We are pleased to return to profitability in the third quarter,” Ed Sims, WestJet President and CEO. “We have achieved this result despite continued downward pressure from the dramatic increases in fuel price and competitive capacity, along with the lingering impact of the threat of industrial action. We now look forward to the delivery of our first Boeing 787-9 Dreamliner in late January, and starting direct services in Spring 2019 from Calgary to London (Gatwick), Paris, and Dublin. I would like to thank every WestJetter for their focus on delivering award-winning service to our guests.”

Operating highlights (stated in Canadian dollars)

Q3 2018

Q3 2017

Change

Net earnings (millions)

$45.9

$135.9

(66.3%)

Diluted earnings per share

$0.40

$1.15

(65.2%)

Total revenue (millions)

$1,260.9

$1,214.6

3.8%

Operating margin

6.2%

16.3%

(10.1 pts)

ASMs (available seat miles) (billions)

8.880

8.077

9.9%

RPMs (revenue passenger miles) (billions)

7.516

6.922

8.6%

Load factor

84.6%

85.7%

(1.1 pts)

Segment guests

6,940,569

6,530,873

6.3%

Yield (revenue per revenue passenger mile) (cents)

16.78

17.55

(4.4%)

RASM (revenue per available seat mile) (cents)

14.20

15.04

(5.6%)

CASM (cost per available seat mile) (cents)

13.32

12.58

5.9%

Fuel costs per litre (cents)

85

62

37.1%

CASM, excluding fuel and employee profit share (cents)*

9.36

9.29

0.8%

 *Refer to reconciliations in the accompanying tables for further information regarding calculations.

In other news, WestJet today announced the addition of nonstop service from St. John’s to Fort Lauderdale/Hollywood this winter. Service is available on a limited basis and starts March 11, 2019 through May 13, 2019.

This winter, along with Fort Lauderdale/Hollywood, WestJet will operate 29 weekly departures from St. John’s including non-stop to Orlando, Toronto and Halifax.

Details on WestJet’s service between St. John’s and Fort Lauderdale/Hollywood:

 Route

Frequency

Departing

Arriving

Effective

St. John’s –  Fort
Lauderdale

Once
weekly

2:30 p.m

6:44 p.m

March 11,
2019

Fort Lauderdale – St.
John’s

Once
weekly

7:30 a.m

1:38 p.m

March 11,
2019

Top Copyright Photo: WestJet Airlines Boeing 737-8 MAX 8 C-GZSG (msn 60516) YYZ (TMK Photography). Image: 943428.

WestJet aircraft slide show:

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Lion Air Boeing 737-8 MAX 8 crashes into the Java Sea, debris found

Delivered August 13, 2018, crashed into the Java Sea on October 29, 2018

Lion Air flight JT 610 from Jakarta to Pangkal Pinang, in the Bangka Belitung Islands, today (October 29, 2018) crashed into the Java Sea shortly after takeoff from Jakarta. The flight was carrying 181 passengers and six crew members. The flight crew made a request to return to JKT.

The aircraft involved was a new Boeing 737-8 MAX 8 (PK-LQP).

Lion Air issued this statement:

Lion Air flight JT610 en-route to Pangkalpinang has crashed near Kerawang (S 5’49.052” E 107’ 06.628”), 13 minutes after taking off from Jakarta Soekarno Hatta International Airport at 6:20 AM.

The flight carried 178 adults, 1 child and 2 infant, including 3 crew under training and 1 technician.

The aircraft is a Boeing 737 MAX 8 with registration number PK-LQP. It is made in 2018 and started its operation at Lion Air since August 15, 2018.  The aircraft was declared operationally feasible.

The aircraft is commanded by Captain. Bhavye Suneja and co-pilot Harvino with six cabin crew Shintia Melina, Citra Noivita Anggelia, Alviani Hidayatul  Solikha, Damayanti Simarmata, Mery Yulianda, and Deny Maula. The captain has 6,000 flight hours and the co-pilot has more than 5,000 flight hours.

Lion Air is concerned with the incident and will work with the relevant authorities and agencies on this matter.

The number to the crisis center is 021-80820001 and for customer information 021-80820002.

Read more from CNN: CLICK HERE

Read more from the BBC: CLICK HERE

Top Copyright Photo: Lion Air (PT Lion Mentari Airlines) Boeing 737-8 MAX 8 PK-LQP (msn 43000) BFI (James Helbock). Image: 944189.

Lion aircraft slide show:

Video:

Southwest reports a third quarter profit

Southwest Airlines Boeing 737-8 MAX 8 N8705Q (msn 42558) LAX (Michael B. Ing). Image: 944056.

Southwest Airlines Company today reported its third quarter 2018 results:

 

  • Record third quarter net income of $615 million
  • Net income of $614 million, excluding special items1
  • Record third quarter earnings per diluted share of $1.08
  • Operating income of $798 million, or $796 million, excluding special items
  • Operating margin2 of 14.3 percent, and net margin3 of 11.0 percent
  • Operating cash flow of $1.3 billion, and free cash flow1 of $817 million
  • Returned $591 million to Shareholders through a combination of share repurchases and dividends
  • Return on invested capital (ROIC)1 pre-tax of 23.4 percent for the 12 months ended September 30, 2018, or 18.1 percent on an after-tax basis

 

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated, “I want to congratulate our Employees on an excellent third quarter 2018 performance, resulting in record third quarter earnings per diluted share. The significant increase in our third quarter 2018 earnings per diluted share was driven by record third quarter operating revenues, lower federal income taxes, and a 4.8 percent year-over-year reduction in share count. Despite higher jet fuel prices and other cost pressures, we grew our third quarter 2018 net margin, year-over-year, which is a notable accomplishment.

“I am grateful to our People for their hard work and resilience, as we continue to consistently deliver stellar margins and returns. With these results, we accrued an additional $135 million in profitsharing for the benefit of our Employees and provided $591 million of share buybacks and dividends for our Shareholders.

“As we finish the year, our revenue momentum has continued into fourth quarter 2018, thus far. Unit revenue trends are stable and have recovered nicely from first half 2018. We are particularly pleased with the performance of our new revenue management tools. With our new reservation system in place since last year, we have more capabilities and are well-positioned to drive revenue growth. We expect $80 million to $90 million of year-over-year improvement in fourth quarter 2018 pre-tax results from these enhanced capabilities, which is in line with our annual 2018 pre-tax goal of $200 million.

“On the cost side, our third quarter 2018 unit cost performance was in line with our expectations. Our fuel hedge portfolio mitigated a significant portion of market jet fuel price increases, and we are pleased with the fuel hedge in place for both fourth quarter 2018 and annual 2019. Based on current trends, we continue to expect modest year-over-year inflation in our annual 2018 unit costs, excluding fuel and oil expense and profitsharing expense.

“Based on our second half 2018 revenue trends, we are well-positioned for year-over-year unit revenue growth in 2019, with easier year-over-year comparisons in first half. We also will continue to experience year-over-year unit cost inflation in 2019, excluding fuel and oil expense and profitsharing expense, of at least three percent, as we continue investing in and deploying new operations, technology, and airport infrastructure to support future growth. With the 2017 retirement of our Boeing 737-300 Classic fleet, launch of the 737 MAX, and implementation of our new reservation system, we continue with our efforts to modernize our fleet, optimize our network, and pursue additional revenue opportunities. Given our healthy revenue outlook, and despite expected cost increases, our 2019 goal is to expand margins year-over-year. We are refocusing our efforts to control costs and drive efficiency, and, as ever, we remain steadfast in our efforts to produce industry-leading margins and superior returns in excess of our cost of capital.

“For next year, Hawaii is our expansion focus, and we continue to expect 2019 available seat miles (ASMs, or capacity) to increase no more than five percent, year-over-year.”

Revenue Results and Outlook
The Company’s third quarter 2018 total operating revenues increased 5.1 percent, year-over-year, to a third quarter record $5.6 billion. Third quarter 2018 operating revenue per ASM (RASM, or unit revenues) increased 1.2 percent, year-over-year, driven largely by a passenger revenue yield increase of 2.3 percent, year-over-year, offset slightly by a load factor decline of 0.9 points, year-over-year, to 83.9 percent. Third quarter 2018 RASM also included an approximate one-half point year-over-year positive impact as a result of approximately 2,200 flight cancellations in third quarter 2018, due to thunderstorms and weather-related disruptions (the “weather cancellations”).

Based on current bookings and yield trends, the Company expects fourth quarter 2018 RASM to increase in the one to two percent range, compared with fourth quarter 2017 RASM of 13.88 cents, as recast in accordance with Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (or the “New Revenue Standard”). The Company adopted the New Revenue Standard effective January 1, 2018, and utilized the full retrospective method of adoption allowed by the standard. As such, results for the three and nine months ended September 30, 2017, have been recast under the new standard in order to be comparable with current period results in the accompanying unaudited Condensed Consolidated Statement of Income. The Company’s third quarter 2018 year-over-year RASM increase included an approximate one point headwind from the change in the Rapid Rewards revenue recognition method as a result of the Company’s adoption of the New Revenue Standard. The Company continues to expect an immaterial impact to its fourth quarter and annual 2018 year-over-year RASM trends as a result of the New Revenue Standard.

Cost Performance and Outlook
Third quarter 2018 total operating expenses increased 7.2 percent, year-over-year, to $4.8 billion. Total operating expenses per ASM (CASM, or unit costs) increased 3.1 percent, as compared with third quarter 2017. Excluding special items in both periods, third quarter 2018 total operating expenses increased 8.1 percent to $4.8 billion, or 4.1 percent on a unit basis, year-over-year.

Effective January 1, 2018, the Company early adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. The new standard eliminated ineffectiveness for all derivatives designated in a hedge for accounting purposes, as well as changed the Company’s classification of premium expense associated with fuel hedges from Other (gains) and losses, net, to Fuel and oil expense within the unaudited Condensed Consolidated Statement of Income. As such, the classification of premium expense for the three and nine months ended September 30, 2017, has been recast under the new standard to be comparable with current period results.

Third quarter 2018 economic fuel costs1 were $2.25 per gallon and included $.06 per gallon in premium expense and $.10 per gallon in favorable cash settlements from fuel derivative contracts, compared with $2.07 per gallon in third quarter 2017, as recast, which included $.06 per gallon in premium expense and $.31 per gallon in unfavorable cash settlements from fuel derivative contracts. Third quarter 2018 ASMs per gallon, or fuel efficiency, improved 1.1 percent year-over-year, driven primarily by the retirement of the Classic fleet and the addition of more fuel-efficient 737-800 and 737 MAX 8 aircraft.

Based on the Company’s existing fuel derivative contracts and market prices as of October 19, 2018, fourth quarter 2018 economic fuel costs are estimated to be in the range of $2.30 to $2.35 per gallon4, including $.07 per gallon in premium expense and an estimated $.14 per gallon in favorable cash settlements from fuel derivative contracts, compared with $2.16 per gallon in fourth quarter 2017, as recast, which included $.07per gallon in premium expense and $.19 per gallon in unfavorable cash settlements from fuel derivative contracts. As of October 19, 2018, the fair market value of the Company’s fuel derivative contracts settling in fourth quarter 2018 was an asset of approximately $82 million, and the fair market value of the hedge portfolio settling in 2019 and beyond was an asset of approximately $521 million.

Based on the Company’s existing fuel derivative contracts and market prices as of October 19, 2018, annual 2019 economic fuel costs are estimated to be in the range of $2.35 to $2.40 per gallon4, including $.04 per gallon in premium expense and an estimated $.08 per gallon in favorable cash settlements from fuel derivative contracts. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.

Excluding fuel and oil expense and special items in both periods, third quarter 2018 operating expenses increased 7.0 percent, as compared with third quarter 2017. Third quarter 2018 profitsharing expense was $135 million, as compared with $127 million in third quarter 2017. Excluding fuel and oil expense, profitsharing expense, and special items, third quarter 2018 operating expenses also increased 7.0 percent, or 3.0 percent on a unit basis, year-over-year. This increase was due primarily to shifting of spending from first half 2018 into third quarter 2018, higher maintenance and advertising expenses, and a nearly one-point year-over-year negative impact as a result of the third quarter 2018 weather cancellations.

Based on current cost trends, the Company estimates fourth quarter 2018 CASM, excluding fuel and oil expense and profitsharing expense, to be flat to up one percent, compared with fourth quarter 2017’s 8.82 cents, as recast, which excluded fuel and oil expense, profitsharing expense, and special items. The Company continues to estimate annual 2018 CASM, excluding fuel and oil expense and profitsharing expense, to be flat to up one percent, compared with annual 2017’s 8.47 cents, as recast, which excluded fuel and oil expense, profitsharing expense, and special items.

Third Quarter Results
Third quarter 2018 net income was a third quarter record $615 million, or a record third quarter $1.08 per diluted share, compared with third quarter 2017 net income of $528 million, or $.88 per diluted share. Excluding special items, third quarter 2018 net income was $614 million, or a third quarter record $1.08 per diluted share, compared with third quarter 2017 net income of $554 million, or $.93 per diluted share, and compared with First Call third quarter 2018 consensus estimate of $1.06 per diluted share.

The Company estimates its effective tax rate to be approximately 23 percent for annual 2018. For annual 2019, the Company estimates its effective tax rate to be approximately 23.5 percent.

Liquidity and Capital Deployment
As of September 30, 2018, the Company had approximately $3.8 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during third quarter 2018 was $1.3 billion, capital expenditures were $454 million, and free cash flow was $817 million. The Company repaid $98 million in debt and capital lease obligations during third quarter 2018, and expects to repay approximately $87 million in debt and capital lease obligations during fourth quarter 2018.

During third quarter 2018, the Company returned $591 million to its Shareholders through the repurchase of $500 million in common stock and the payment of $91 million in dividends. The Company repurchased 8.2 million shares of common stock pursuant to a $500 million accelerated share repurchase program (ASR) launched during third quarter 2018 and completed earlier this month. The Company’s third quarter ASR completed the remaining $350 million of its previous $2.0 billion share repurchase program that had been authorized by its Board of Directors in May 2017, and initiated the $2.0 billion share repurchase program authorized by its Board of Directors in May 2018. The Company has $1.85 billion remaining under its current authorization.

For the nine months ended September 30, 2018, net cash provided by operations was approximately $3.9 billion. Capital expenditures, including net proceeds from assets constructed for others, were approximately $1.3 billion, and free cash flow was $2.6 billion. This enabled the Company to return approximately $1.8 billion to Shareholders through the repurchase of $1.5 billion in common stock and the payment of $332 million in dividends.

The Company continues to estimate its annual 2018 capital expenditures to be in the $2.0 to $2.1 billion range. For annual 2019, capital expenditures are expected to be similar to 2018 levels.

Fleet and Capacity
The Company ended third quarter 2018 with 742 aircraft in its fleet. This reflects the third quarter delivery of five new 737-800s and seven new 737 MAX 8s. The Company continues to expect to end 2018 with 751 aircraft in its fleet based on the current aircraft delivery schedule. Additional information regarding the Company’s aircraft delivery schedule is included in the accompanying tables:

The Company now expects its annual 2018 year-over-year ASM growth to be approximately four percent, slightly lower than previously expected, due primarily to the third quarter 2018 weather cancellations. The Company now expects fourth quarter 2018 year-over-year ASM growth to be in the 6.0 to 6.5 percent range.

1See Note Regarding Use of Non-GAAP Financial Measures for additional information on special items, free cash flow, and ROIC. In addition, information regarding special items, ROIC, and economic results is included in the accompanying reconciliation tables.
2Operating margin is calculated as operating income divided by operating revenues.
3Net margin is calculated as net income divided by operating revenues.
4Based on the Company’s existing fuel derivative contracts and market prices as of October 19, 2018, fourth quarter 2018 fuel costs per gallon on a GAAP and economic basis are both estimated to be in the $2.30 to $2.35 range, and annual 2019 fuel costs per gallon on a GAAP and economic basis are both estimated to be in the $2.35 to $2.40 range. See Note Regarding Use of Non-GAAP Financial Measures.

Top Copyright Photo (all others by Southwest): Southwest Airlines Boeing 737-8 MAX 8 N8705Q (msn 42558) LAX (Michael B. Ing). Image: 944056.

Southwest aircraft slide show:

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Gol renewing fleet with 135 Boeing 737 MAXs, will launch flights to Miami and Orlando

First MAX 8, delivered on June 27, 2018

Gol Linhas Aéreas Inteligentes, Brazil’s largest airline, is renewing its fleet with an order of 135 Boeing 737 MAX aircraft, which are expected to be fully delivered by 2028.

Gol already operates Brazil’s newest and most modern fleet. The delivery of 105 Boeing 737 MAX 8 and 30 Boeing 737 MAX 10 aircraft will maintain this competitive advantage, while enabling the airline to expand its operations with more long-haul flights.

The first three MAX 8 aircraft were delivered to Gol between June and October 2018 and are already operating on commercial flights. The company will add four MAX 8 aircraft to its fleet by the end of 2018, replacing its Next Generation (NG) models.

Gol currently operates 91 Boeing 737-800s and 24 737-700s.

The Boeing 737 MAX 8 was developed by Boeing with the help of Gol’s pilots, engineers and technicians. The new aircraft are equipped with state-of-the-art technology, offering the best operational performance and a range of over 4,000 miles, enabling Gol to fly to new destinations. Among other improvements and innovations, the Boeing 737 MAX 8 also has reduced fuel consumption and lower emissions.

The 737 MAX 10 aircraft will comfortably accommodate 30 additional passengers when compared to the MAX 8 seating configuration, which accommodates up to 186 clients. This increase in passenger numbers will give GOL greater network flexibility and a competitive advantage over long-term costs, as the MAX 10 will have the lowest cost-per-seat of any single-aisle aircraft on the market. It expects to fly the first MAX 10 aircraft in its fleet in 2022.

In other news, the company announced it is launching direct flights from Brazil to U.S. destinations, including Miami and Orlando on November 4, 2018. The routes will be operated by Gol’s new Boeing 737 MAX 8 aircraft, which can fly further.

The new routes to Florida will have four daily flight departures from Brasília and Fortaleza in Brazil. GOL’s route network ensures that Customers can make fast and efficient connections to and from a further 30 Latin American destinations.

Gol’s existing partnership with Delta Airlines (NYSE: DAL) will also allow the new flights to Florida to be connected to eight cities served by the North American airline: Atlanta, Salt Lake City, Cincinnati, New York LaGuardia, Detroit, Los Angeles, Indianapolis and Minneapolis.

Top Copyright Photo (all others by Gol): Gol Transportes Aereos Boeing 737-8 MAX 8 PR-XMA (msn 43986) GRU (Rodrigo Cozzato). Image: 942795.

Gol aircraft slide show:

Kunming Airlines takes delivery of its first Boeing 737-8 MAX 8

First MAX 8 for Kunming Airlines

Kunming Airlines has joined the Boeing 737 MAX Club with the delivery of its first Boeing 737-8 MAX 8.

The first MAX 8 will join Kunming’s Boeing 737 fleet of 25 airplanes and will use the MAX’s longer range capabilities to extend their network.

The airline commenced operations on February 15, 2009 from Kunming to Changsha and Harbin.

Top Copyright Photo (all others by Boeing): Kunming Airlines Boeing 737-8 MAX 8 B-206Y (msn 43952) BFI (Joe G. Walker). Image: 943946.

Kunming aircraft slide show:

The Boeing 737 MAX Club:

Boeing, Air Lease Corporation, deliver S7 Airlines’ first 737 MAX

First MAX 8 for S7 Airlines

Boeing, Air Lease Corporation (ALC), and S7 Airlines celebrated the delivery of the airline’s first 737 MAX, via lease from ALC.

S7, operated by Globus Airlines, becomes the first Russian airline to fly the new and improved 737 airplane. S7 plans to take 10 more 737 MAX jets over the next few years as part of its strategic plan to strengthen its airplane fleet.

The 737 MAX 8 is part of a family of airplanes that offer from about 130 to 230 seats and the ability to fly up to 3,850 nautical miles (7,130 kilometers). The MAX 8, in particular, can seat up to 178 passengers in a standard configuration and features the popular Boeing Sky Interior. The airplane helps reduce fuel use and emissions by 14 percent compared to previous airplanes, outperforming the competition by 8 percent when it comes to operating costs per seat.

The 737 MAX is the fastest-selling airplane in Boeing history with more than 4,700 orders from 104 customers worldwide.

Top Copyright Photo (all others by S7 Airlines): S7 Airlines Boeing 737-8 MAX 8 VQ-BGW (msn 43302) BFI (Joe G. Walker). Image: 943925.

S7 Airlines aircraft slide show:

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