LOT, Smartwings Fight for Boeing 737 MAX Compensation

DALLAS — The fallout surrounding the 737 MAX groundings continues to plague Boeing four years later. LOT Polish Airlines (LO) and Smartwings (QS) have leveled new accusations against the American aircraft manufacturer.

They blame Boeing for failing to meet their demands to reimburse losses caused by the aircraft's worldwide flight ban in March 2019.

LOT has also requested the court to reopen Boeing's settlement with the US Department of Justice, joining similar petitions from an attorney for crash victims' beneficiaries. In 2021. Boeing reached the so-called "Deferred Prosecution Agreement" with the DOJ, for which the Seattle-based company would have agreed to dedicate US$1.77bn to cover grounding-related damages for airlines, US$500m to crash victims' beneficiaries, plus US$244m in criminal penalties.

However, various airlines, including the LO mentioned above and QS, have declared that the agreed compensations have not yet arrived, and settlements are ongoing.

"Boeing has been extremely secretive about the airline fund, and the few details that have leaked out have suggested that Boeing is not administering it fairly," stated Smartings in November 2022 court filings. LO added, "Because Boeing was given discretion as to how the airline compensation found would be allocated, Boeing was not required to compensate foreign airlines."

Worldwide carriers have not only suffered from fleet shortages due to the grounding of the Boeing 737 MAX jets but also struggle even today with continuous delivery delays from the manufacturer in terms of deliveries, which has forced airlines to contract ACMI operators to cover their scheduled flights or to purchase second-hand Boeing 737 MAX jets from defunct airlines and lessors.

Airlines' Methods to Survive the MAX Crisis

Due to the two fatal Boeing 737-8 crashes and the worldwide grounding of the Boeing 737 MAX fleet in 2019, 390 operating aircraft from dozens of airlines were immediately grounded, while more than 400 expected deliveries from Boeing were stopped.

In 2021, aviation safety authorities started to lift the flight ban for the type, and operations were restored. But, until then, what have airlines done to survive the crisis and fill the enormous market gap left by the grounding of Boeing 737 MAX aircraft?

Moving back to LOT and Smartwings, the Polish carrier managed to expand its fleet by purchasing stored and retired aircraft from defunct airlines such as Jet Airways (9W) and Alitalia (AZ), which include three Embraer E-175s, four E-190s, five E-195s, and three Boeing 737-800s. LO adds up to six second-hand Boeing 737 MAX jets from Blue Air (0B) but has not received any brand-new units since the grounding.

Smartwings, on the other hand, has performed a giant restructuring that resulted in the transfer of 20 Boeing 737-800 units from its partner Travel Service (QS) and other carriers in response to the groundings and is still waiting for three more deliveries of the MAX variant.

Apart from purchases, ACMI services and wet-lease have had a significant impact in recent years, when airlines such as Smartlynx (6Y) and GetJet (GW) have suddenly gained many customers needing aircraft to support their operations.

Featured image: LOT Boeing 737 MAX. Nick Sheeder/Airways

https://airwaysmag.com/ryanair-boeing-737ng-max-delays/