Boeing 737 Max: Grounding means 40m fewer plane seats available this summer

Norwegian, the biggest UK-focused operator of the Boeing 737 Max at the time of the grounding, shows a reduction of 3.4 million

Uncertain future: a Boeing 737 Max belong to Norwegian, with a tailfin depicting Jane Austen (Norwegian)

Forty million fewer aircraft seats than anticipated are available this summer after the worldwide grounding of the Boeing 737 Max.

Aviation authorities banned the jet after two tragedies blamed on a flawed anti-stall system claimed a total of 346 lives.

The first crash, in Indonesia in October 2018, killed 189 people. A second 737 Max accident in Ethiopia in March 2019 claimed another 157 lives.

In both cases, a faulty sensor triggered software that tilted the nose down with overwhelming force. The aircraft was grounded a few days after the second crash.

Boeing is working on a fix, and hopes the aircraft will be flying commercially again by October.

Meanwhile the schedule provider, OAG, has compared planned 737 Max capacity announced by airlines before the grounding with their present plans.

“The numbers are staggering,” writes the senior aviation analyst, John Grant in a new blog.

One airline, China Southern, has 3.6 million fewer seats to sell this summer. Norwegian, the biggest UK-focused operator of the Boeing 737 Max at the time of the grounding, shows a reduction of 3.4 million.

Air Canada has 3.3 million fewer seats, while Tui Airways features in the top 10 with a cut in capacity of 900,000. Tui operated the jet from Manchester until the grounding.

Mr Grant writes: “Last-minute schedule adjustments are, we know, challenging for any carrier, but the scale of the B737 Max grounding has been very disruptive for many.”

“Some carriers may have had a higher dependency on Max flying, some may have had quicker and cheaper access to alternate aircraft, and some may perhaps have been able to mitigate some of their cost.

“Alongside the cost there will also be a loss of revenue for many airlines, some of whom may have sold more cheaper advanced purchase capacity based on B737 Max capacity and then found themselves unable to ‘revenue manage’ their flights as originally intended.”

In other words, with lower-capacity aircraft standing in for the Boeing 737 Max, the airlines have fewer seats available than expected to sell at short notice and high prices.

The study estimates that per seat there is “a notional $100 [£82] for the combined impact of additional costs, both direct and indirect, and the loss of revenue for the airlines affected”.

The total loss of $4.1bn (£3.4bn) assumes a November reintroduction of the aircraft, which, says Mr Grant “looks increasingly unlikely”.

“Accountants will, of course, be keeping a very close eye on every expense incurred as a result of the grounding as they prepare a series of claims for the inconvenience caused.”

The OAG figures correlate with Boeing’s published second-quarter loss of $4.9bn (£4bn), attributed to payouts to airlines whose planes are standing idle – as well as carriers expecting deliveries of the aircraft. The most significant of these is Ryanair, which has ordered 210 Boeing 737 Max aircraft in a unique, high-density configuration.

Europe’s biggest budget airline was due to take delivery of the first in April 2019, with entry to service in May. But Ryanair now says it does not expect to start flying the plane until January 2020, and has blamed the delay for lower-than-expected planned expansion.

British Airways’ parent company, IAG, has signed a non-binding order, known as a Letter of Intent, for 200 Boeing 737 Max aircraft. If the order is confirmed, the jets would be delivered between 2023 and 2027.