Boeing suspends entire 737 Max fleet as insurance details come to light

Boeing has suspended all 371 of its worldwide 737 Max aircraft fleet, after the US became the last major country to ground the planes over safety fears. The decision follows news that Global Aerospace is the lead insurer for Boeing, with Chubb confirmed as lead underwriter of the Ethiopian Airlines plane that crashed on Sunday and Willis Towers Watson the broker. Ethiopian Airlines flight 302 crashed shortly after take-off from Addis Ababa. All 157 passengers and crew were killed. It is the second fatal accident involving one of Boeing’s new 737 Max 8 models in the past four months. In October, a Lion Air plane crashed into the sea after taking off from Jakarta. All 189 people onboard were killed. Boeing’s decision came after US President Donald Trump yesterday ordered the grounding of Boeing 737 Max 8 and 9 aircraft. The US was the last major country to make the decision after its regulator the Federal Aviation Administration (FAA) initially decided to keep the planes flying because it felt they had “no systemic performance issues”. But the FAA yesterday said new information from the wreckage of the 737 crash in Ethiopia had uncovered similarities to the Lion Air incident. The FAA’s emergency order states that the similarities “warrant further investigation of the possibility of a shared cause for the two incidents that needs to be better understood and addressed”. Boeing said it has “full confidence in the safety of the 737 Max” but “out of an abundance of caution and to reassure the flying public”, it has temporarily suspended the entire fleet. Canada grounded the planes shortly before the US took the same action. The country’s transportation minister Marc Garneau said the decision to issue a safety notice was based on a review of newly available satellite tracking data. It identified similarities between the Ethiopian Airlines crash this week and the Lion Air incident. Mr Garneau stressed that the information is “not conclusive” but added that “at this point we feel that the threshold has been crossed”. Some 42 countries, including those in the EU, have banned the jets over safety fears since Sunday’s fatal accident. Australia, Singapore, China, Indonesia and Ethiopia first suspended flights, before the EU followed suit. The EU’s Aviation Safety Agency suspended all Boeing 737 Max 8 and 9 flights after the UK, Ireland, Germany and France made similar moves. US carrier Southwest Airlines has the most 737 Max aircraft in its fleet at 34, followed by Air Canada and American Airlines with 24 each. In Europe, Norwegian Airlines has 18 of the planes and has already asked Boeing for compensation for the disruption. Pilots of at least two US flights have complained that their new Boeing jet pointed its nose down automatically, according to media reports. Boeing has been developing a flight-control software enhancement for the 737 Max since Lion Air flight 610 crashed in October. The change is designed to make “an already safe aircraft even safer”, said the firm. Boeing has been working closely with the FAA on developing, planning and certifying the software enhancement, which it said will be deployed across the 737 Max fleet in the coming weeks. The aircraft manufacturer said the FAA anticipates mandating the software enhancement with an airworthiness directive no later than April. Meanwhile, Global Aerospace has confirmed it is the lead insurer for Boeing. The policy could see heavy product liability claims against the grounded aircraft. “I can confirm that Global Aerospace leads Boeing, and also Lion Air,” Global Aerospace CEO Nick Brown told Reuters in an email. Chubb is the lead underwriter of the Ethiopian Airlines plane that crashed on Sunday with Willis Towers Watson the broker, a spokesperson for the intermediary confirmed. Experts have placed the hull loss at about $50m to $60m, with potential liability losses on top. The latest crash and grounded aircraft are likely to increase the chance of the aviation insurance market hardening further. Increased rates were already expected this year, driven by consolidation, market withdrawals and rising claims costs.

Boeing suspends entire 737 Max fleet as insurance details come to light

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