Why Airbus is stunned after Boeing bagged $24 billion 737 MAX deal, just months after Ethiopia Airlines crash

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In March 2019, aviation regulators and airlines grounded 394 Boeing 737 MAX passenger airliners worldwide after two newly delivered aircraft crashed in within four months and ten days, killing all 346 people aboard both flights, it triggered one of the worst crises in the company's more than 100-year history.

The accidents befell Lion Air Flight 610 on October 29, 2018, and Ethiopian Airlines Flight 302 on March 10, 2019. Consequently, most other regulators and airlines banned aeroplane in the next two days.

Muilenburg, who has been under fire over the MAX design and Boeing's handling of the crisis acknowledged the company made a mistake in failing to disclose a defective cockpit warning light on its 737 MAX to regulators and customers and said that failure has been part of reviews by global regulators.

Only a handful of A380s and Dreamliners were in operation at the time their problems surfaced.

Boeing has already delivered nearly 400 of its 737 MAX series aircraft and has orders for about 5,000 more.

This is a lot compared to rival Airbus, which has delivered just 234 A380 aircraft since 2007, and the 1,400 orders of Boeing’s Dreamliner since 2004 (around 800 have been delivered already).

Boeing won a major vote of confidence at the Paris Airshow as British Airways owner International Airlines Group signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.

News of the deal, worth more than $24 billion at list prices, sent shockwaves around the world's largest air show which had struggled to find its rhythm amid the 737 MAX crisis and concerns about an economic slowdown.

International Airlines Group (IAG) said, the mix of 737-8 and 737-10 aircraft, to be delivered between 2023 and 2027, would be powered by CFM Leap engines and used across a number of its airlines including British Airways, Vueling and Level.

IAG Chief Executive Willie Walsh said he had experienced Boeing's MCAS anti-stall software in person, adding it was "very helpful to see it in operation" and to "understand the changes" that Boeing was proposing.

"It gave me confidence both in terms of the aircraft and the changes that Boeing introduced," Walsh said at the announcement of the deal at the Paris Airshow.

Airbus, the current supplier of IAG`s British Airways and Vueling brands, was stunned by the announcement which came months after it lost a major British Airways wide-body aircraft order to its US rival.

Industry sources said the European company had not been offered a chance to bid.

"We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months," IAG Chief Executive Willie Walsh said of the 737 MAX, announcing the first deal for the plane since its grounding.
 

Boeing has acknowledged it will take time to restore trust after a widely criticised response to the crashes and insiders say the company has assumed that the job of rebuilding confidence must, for now, be led by airlines and regulators.

The deal, covering a period at least four years away when some airlines are already hesitating to commit due to economic risks, will have come at what one experienced aircraft negotiator described as a "spectacular" price discount.

While the deal rescued Boeing's fortunes inside the air show, safety experts stressed it remains unclear how and when regulators will allow the plane to fly. Walsh stressed it was up to the US and global regulators to review the fix.