The investigation on the Ethiopian Airlines crash of March 10, 2019 continues. Preliminary data revealed that the plane’s stall prevention system, which had been linked to another deadly accident five months earlier, automatically activated before the crash. Boeing launched a software update to fix the problem but the company remains in hot water after the family of one of the victims sued the planemarker in the US federal court. All Boeing 737 Max remain grounded, which has hit the earnings of at least two operators.
In other news, passengers found themselves stranded across the globe as low-cost airline Wow Air halted operations without warning. Airbus got a multibillion order for 300 airplanes from China. In Mexico, news indicated that all local airlines had increased the costs of complementary services in 2018 and the country’s flagship airline was fined for monopolistic practices allegedly committed a decade ago.
Now jump into last week’s highlights:
Aviation Ups and Downs
Icelandic budget airline Wow Air shut down without warning on Thursday. The airline’s immediate stop of operations meant the cancellation of all flights, which took passengers by surprise and left thousands stranded across the globe. Some passengers found out about the cancellation minutes before boarding.
Airbus won a 300-airplane order from China valued at US$34 billion according to listed prices.
Mexican airlines raised costs for complementary services, including on-flight food and seat choosing during 2018. On average, these added costs represented a third of the revenue for the four Mexican airlines: Aeroméxico, Interjet, Volaris and Viva Aerobus.
The Mexican Federal Commission for Economic Competition (COFECE) fined Aeroméxico for engaging in monopolistic practices between 2008 to 2010.
Director of Viva Aerobus, Juan Carlos Zuazua, called for smaller airport tariffs to accelerate the industry’s growth. The low-cost airline also announced four new routes to Cuba this week.
Ethiopian Airlines Crash Aftermath
Preliminary results from the March 10 Ethiopian Airlines accident investigation indicate that the Boeing 737 Max’s anti-stall system automatically activated before the crash that killed 157 people.
Boeing launched a software upgrade that the company says fixes the automated flight control system linked to the Ethiopian Airlines and Lion Air crashes. The software has not been approved by the FAA so far.
The family of one of the victims of the Ethiopian Arilines crash sued Boeing in the US Federal Court.
Groundings of 737 Max fleets have started to hit airlines’ earnings. US airline Southwest, which owns 34 Boeing 737 Max, cut its financial outlook by US$150 million for 1Q19. German airline TUI also cut its expected earnings for 2019 by US$225 million.