Boeing's parking bill mounts as 737 Max remains grounded worldwide
WHILE regulators contemplate whether Boeing's 737 Max can safely return to the skies, workers in a California airplane-storage yard have sealed 34 Southwest Airlines jets against the Mojave Desert's sun, wind and sand, as well as insects and birds that can creep into wheel wells and engine air inlets
WHILE regulators contemplate whether Boeing's 737 Max can safely return to the skies, workers in a California airplane-storage yard have sealed 34 Southwest Airlines jets against the Mojave Desert's sun, wind and sand, as well as insects and birds that can creep into wheel wells and engine air inlets.
Southwest declined to discuss the expense, but one industry veteran said such sojourns run about US$2,000 a month for each plane, which is small but critical cost amid Boeing's many looming financial penalties.
The attention lavished now on the planes will help determine how fast the Max get back in the air once a worldwide grounding is lifted.
'Planes are meant to be flying and being used,' said Tim Zemanovic, who used to own an Arizona storage park and estimated monthly storage costs, which include labour and materials. 'You've got to keep them that way even when they're in storage.'
The constant care extends to almost 500 grounded Max planes around the world, a total that includes about 100 factory-fresh jets that can't be delivered to customers because of the flying ban, which began in March after the second deadly crash in five months. Managing aircraft upkeep on such a scale is unprecedented, as Boeing grapples with a crisis that has already lopped $41.5 billion off its market value.
The maintenance costs are just the start of Boeing's financial exposure. The Chicago-based aircraft manufacturer also faces an estimated $1.4 billion bill for airlines' cancelled flights and lost operating profit if the Max fleet is still grounded by the end of September, said Bloomberg Intelligence analyst George Ferguson.
Boeing's inventory could balloon by nearly $12 billion by the end of September if regulators don't act and 737 production continues at the current pace, Mr Ferguson said.
'They can't keep building and parking planes indefinitely,' he said. 'We don't think it will get to that, but it's going to take a lot of cash to park those in the desert.'