TORONTO — WestJet Airlines plans to stick with deliveries of Boeing 737 Max aircraft once regulators approve the plane for re-entry into service.
The Calgary-based airline says it won’t follow the lead of Indonesia’s flag carrier, which cancelled its multibillion-dollar order for 49 Max 8 jets, citing a loss of confidence after two deadly crashes in the past six months.
WestJet had expected to add two more of the planes this year to increase its fleet to 13, but Boeing has suspended all future deliveries.
Spokeswoman Lauren Stewart says the 37 remaining deliveries in its order won’t take place until the grounding is lifted and it thoroughly evaluates any upgrades.
“If the grounding has been lifted and the aircraft is approved for re-entry into service by all relevant regulatory bodies, we will take all deliveries as intended,” she wrote in an email.
Stewart said the narrow-body planes remain “a vital part of the fleet,” having performed “safely, reliably and efficiently” since 2017.
“WestJet remains unrelenting in putting safety at the forefront and will thoroughly evaluate processes, procedures and any further required training before these aircraft once again take to the skies.”
Air Canada and Sunwing didn’t immediately respond to requests for comment.
Garuda Indonesia is the first airline to cancel an order for the troubled planes.
J.P. Morgan transportation analyst Seth Seifman believes that most major players in global air travel would like to see the plane flying again soon.
But he said it can’t take off again until investigators have reached preliminary conclusions about the March 10 Ethiopian Air crash and similarities with the Lion Air crash last October, which he said could come as early as next week.
“If the conclusion is that from an aircraft point of view, MCAS (computer system) was the main contributing factor, then the fix Boeing has developed post-Lion, combined with enhanced training, would be appropriate in this case as well,” he wrote in a report.
However, if the investigation points to a different explanation then Boeing would have to address another cause.
“The worst case for ending the grounding is an inconclusive result,” he added.
Regulatory approval could be delayed because foreign regulators, including the Canadians and Europeans, have already discussed conducting their own assessments of Boeing’s MCAS fix separate from the U.S. Federal Aviation Administration.
“We believe it is in everyone’s interest to avoid a prolonged situation where the U.S. and perhaps a handful of other regulators have lifted the grounding but other important authorities have not since this could be a step toward a less competent, less efficient, and more politicized global regulatory regime over time.”
Seifman said customers could stop paying advances on the plane because of uncertainty over delivery dates. He estimates the aircraft sells for about US$55 million despite a US$120 million list price.
Airline compensation will likely remain unknown because of confidential contractual terms. But he assumes Boeing will pay some compensation — likely in future purchase terms than in a refund — to customers facing serious challenges from the global grounding and to avoid future legal action.
Companies in this story: (TSX:WJA, TSX:AC).
Ross Marowits, The Canadian Press