Boeing CEO Says Sim Training Drove New Forecast
January 22 2020 - 2:20PM
Dow Jones News
By Doug Cameron and Andrew Tangel
Boeing Co. Chief Executive David Calhoun on Wednesday said the
driver for the new forecast for securing regulatory approval and
returning the 737 MAX to service was the decision to recommend
simulator training for pilots.
The company's surprise reversal of its prior position that
computer-based training would be sufficient places additional
strain and costs on airlines looking to resume flying.
Boeing said Tuesday that it didn't expect regulators to approve
the return of the MAX to commercial service until mid-year, at
least three months longer than most analysts expected.
Mr. Calhoun said airline pilots were key to restoring consumer
confidence in the plane, which has been grounded since last March
following two fatal crashes.
He said the new forecast reflected "new ground rules" and a
departure from prior practice that included best-case scenarios.
"It doesn't have a sharp deadline attached to it," he told
reporters, a week ahead of the release of earnings that are likely
to show the aerospace giant nursing a full-year loss for 2019.
Boeing has already set aside more than $9 billion to cover
customer compensation and higher costs to produce a backlog of
4,500 MAX jets, and analysts expect this figure to climb to $16
billion or more.
The latest delay is sending ripple effects through Boeing, its
suppliers and customers. MAX production is being suspended, forcing
suppliers to consider job cuts, while most airlines have already
removed the plane from schedules through June. United Airlines
Holdings Inc. said Wednesday it didn't plan to fly the plane this
summer.
Mr. Calhoun said MAX production would likely resume "months"
before the plane was cleared by regulators.
Boeing shares hit a new 52-week low ahead of his media call. The
stock was recently down 1.5% at $308.65.
Mr. Calhoun became CEO on Jan. 13 following last month's ouster
of Dennis Muilenburg.
Write to Doug Cameron at doug.cameron@wsj.com and Andrew Tangel
at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
January 22, 2020 14:05 ET (19:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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