Financial damages caused by 737 MAX jets' global grounding will not affect Boeing Co.'s capacity to invest in the aircraft services sector in the future, Reuters reported citing an interview with CEO Dennis Muilenburg.
Since the entry of 737 MAX 8 jets into service in 2017, two aircraft have crashed, one operated by Indonesian airline Lion Air in October 2018 and another operated by Ethiopian Airlines in March 2019. This led to the grounding of the jets across the globe, resulting in a 35% decline in the company's second quarter revenue in 2019.
Muilenburg said Boeing was in the process of fixing the software that was key to both of the crashes and was aiming at getting the aircraft back in service early in the fourth quarter of 2019, Reuters reported. The upgraded software has been used in 560 flights so far, he said.
The company is planning to build its aircraft parts, analytics and maintenance business into a $50 billion business in the next 10 years, from $17 billion in 2018, Muilenburg said.
The aircraft manufacturer's latest acquisitions in the space include mobile and web-based aviation application provider ForeFlight LLC in March 2019 and aviation parts supplier Boeing Distribution Services Inc. in October 2018.
The CEO said Boeing is in talks with its supply chain regarding future production rates as it looked to ramp up delivery to 52 aircraft per month in February and reach a record 57 per month by June. Those would be decided by the time the jets return to service in October, depending on the U.S. Federal Aviation Administration's clearance, but the FAA has not set a timeline for the approval yet, Reuters said.
Despite engineers being reassigned to work on the 737 MAX, Boeing has continued work on a new mid-market aircraft that it expects to replace its 757s and 767s in 2025, Muilenburg said.
A potential deal between the U.S. and China to end the trade war could include an aircraft order from China, he said.
