China grounded its fleet of Boeing Co. 737 Max 8 jets after a plane operated by Ethiopian Airlines crashed on Sunday, escalating the scrutiny on the best-selling model, which has been involved in two deadly accidents in five months.
Local carriers have until 6 p.m. local time to ground the 96 737 Max jets that they operate, according to Chinese government statements. The order came a day after a 737 Max run by Ethiopian Airlines plunged to the ground on its way to Kenya, killing all 157 people on board and prompting the carrier to halt flights using the model. The African airline said Monday it’s grounding its 737 Max 8 jets until further notice.
A blanket grounding in one of the world’s biggest and influential travel markets is a blow to Boeing’s reputation — and a potential threat to the Chicago-based planemaker’s finances with China’s move raising the prospect other markets could follow suit. Chinese airlines accounted for about 20 percent of 737 Max deliveries worldwide through January, according to the company’s website, and further Boeing purchases are said to have been touted as a possible component of a trade deal with the U.S.
China Southern Airlines Co. has 16 of the aircraft, with another 34 on order, according to data through January on Boeing’s website. China Eastern Airlines Corp. has 13, while Air China Ltd. has 14, Boeing says. Other Chinese airlines to have bought the Max include Hainan Airlines Holdings Co. and Shandong Airlines Co., the data show.
The single-aisle plane accounts for almost one-third of Boeing’s operating profit and is poised to generate about $30 billion in annual revenue as factory output rises to a 57-jet monthly pace this year, according to Bloomberg Intelligence estimates.
The doomed Ethiopian jetliner left Addis Ababa at 8:38 a.m. local time, and contact was lost six minutes later, the company said in a statement. There were people from 35 nations on board, including 32 Kenyans, 18 Canadians, nine Ethiopians and eight Americans. The United Nations, which is hosting an environmental conference this week in Nairobi, said it lost 19 staff members in the crash.
The pilot of the ET302 reported problems shortly after takeoff and was cleared to return to the airport, said the airline’s chief executive officer, Tewolde GebreMariam. The 737 Max 8 hadn’t had any apparent mechanical issues on an earlier flight from Johannesburg, he said.
The disaster in Ethiopia followed the crash of a Lion Air 737 Max into the Java Sea off the coast of Indonesia on Oct. 29. A preliminary report into that disaster, which killed 189 passengers and crew, indicated that pilots struggled to maintain control following an equipment malfunction.
Ethiopian Airlines had five of the planes in operation as of the end of January and orders for a further 25, according to Boeing’s website.
Indonesia’s transportation safety committee said Monday it offered to help with the Ethiopian Airlines crash investigation and will discuss the possibility of grounding Boeing 737 Max jets operated by the nation’s airlines. Jet Airways India Ltd. and SpiceJet Ltd., two Indian airlines that use the 737 Max jet, and the country’s regulators have asked Boeing for information following the Ethiopia crash.
Southwest Airlines Says it’s “confident in the safety of our fleet” including its 34,737 Max 8 planes. American Airlines will closely monitor the investigation via Boeing and NTSB Singapore Airlines Monitoring the situation; the 737 Max 8 flights operated by SilkAir are flying as scheduled.
Icelandair Says it’s had no issues with its three 737 Max 8s. Korean Air Due to receive its first Max in April, is monitoring the situation. Cayman Airways Grounds both its Boeing 737 Max 8 aircraft. Thailand Says it currently has no plans to ground Boeing 737 Max jets.
Boeing earlier said it was preparing to send a technical team to assist the accident investigation of the Ethiopian Airlines plane, which was delivered new in November to Africa’s biggest carrier.
Boeing also said it is postponing the “external debut” of its 777X model and related media events scheduled for this week because of the accident. There is no change to the plane’s schedule or progress, Boeing said.
The U.S. Federal Aviation Administration, which originally certified the 737 Max, declined to add to its earlier statement saying it is “closely monitoring developments” in the Ethiopian investigation.
A U.S.-ordered grounding of an entire model of aircraft is extremely rare and in the past has typically not occurred so soon during an investigation when few details are known.
The last time the agency did so was in January 2013 as a result of overheating lithium-ion batteries on Boeing’s 787 model. The agency only acted after the second such incident occurred.