Ethiopian Airlines expects a settlement with planemaker Boeing by end of June over the crash of an 737 MAX plane in March 2019, CEO Tewolde Gebremariam told Reuters on Friday.by Giulia Paravicini, Reuters May 16th 2020 · 2 min read
ADDIS ABABA - Ethiopian Airlines expects a settlement with planemaker Boeing (BA.N) by end of June over the crash of an 737 MAX plane in March 2019, CEO Tewolde Gebremariam told Reuters on Friday.
FILE PHOTO: Ethiopian Airlines CEO Tewolde Gebremariam speaks during a news conference amid concerns about the spread of coronavirus disease (COVID-19), in Addis Ababa, Ethiopia April 7, 2020. REUTERS/Tiksa Negeri/File Photo
Ethiopian Airlines flight 302 bound for Kenya crashed six minutes after take-off from Ethiopia’s capital Addis Ababa, killing all 157 passengers and crew.
It was the second deadly crash of a 737 MAX in less than six months, and led to the worldwide grounding of Boeing’s top-selling jet, which remains in force.
“We have invited Boeing to discuss compensation. It’s compensation for the grounded MAX ... there is also compensation for delayed delivery of the MAX that was supposed to come and loss of revenue,” Tewolde said in an interview.
Ethiopian now has four MAX planes in its fleet. The CEO did not specify how many it has on order.
“By the end of June, which is the end of our fiscal year, we should have something ... meaning compensation,” he said.
Ethiopian, Africa’s largest airline, is also seeking compensation for the impact of the accident on its brand, Tewolde said.
But the airline has decided not to pursue a lawsuit against Boeing as it remains a “partner” and Ethiopian uses many of its planes, he said, adding the settlement could be in form of cash or supplies of plane parts.
He did not say how much compensation the airline was seeking in total.
Boeing could not immediately be reached for comment.
Since early March, Ethiopian has converted 22 passengers planes to cargo aircraft, stripping out all seats, the CEO said.
The move has helped the company to survive as passenger revenues have disappeared due to travel restrictions across the world to contain the coronavirus pandemic.
Demand for cargo, however, has grown, mainly to transport personal protective equipment and medical supplies to tackle the virus.
“Normally cargo would make 15% of our revenue, but at this time when the passengers revenue is almost gone we are only surviving on cargo,” Tewolde said.
He said that, so far, Ethiopian had not cancelled any purchases of planes despite the collapse in air travel, though several orders, including some from Boeing and Airbus (AIR.PA), had been delayed.
Ethiopian made a loss of $550 million between January and April, but Tewolde ruled out seeking a bailout from the Ethiopian government.