Airlines want joint lifting of 737 MAX ban, but EU cautious

Global body warns of trade war spillover

FE Team | Published: June 02, 2019 23:29:52

SEOUL, June 02 (Agencies): Airlines urged regulators on Sunday to coordinate on software changes to the Boeing 737 MAX in a bid to avoid damaging splits over safety seen when the aircraft was grounded in March.
The International Air Transport Association (IATA), whose 290 carriers account for 80 per cent of world flying, said trust in the certification system had been damaged by a wave of separate decisions to ground the jet, with the US last to act.
Airlines are worried further differences between regulators over safety could confuse passengers and cause disruption.
"Any rift between regulators is not in anyone's interest," IATA Director General Alexandre de Juniac told an annual meeting of the association in Seoul.
Boeing's best-selling jet was grounded after two crashes, in Indonesia and Ethiopia, over five months killed a total of 346 people.
The Federal Aviation Administration initially resisted the decisions led by China, but later followed suit.
Airline officials say any new bout of staggered decisions could cause problems in operations and code-sharing.
"Obviously for us to operate the MAX, the approval from the Singapore authorities is not enough. We have to operate somewhere ... Indonesia and China are two important markets for us," Singapore Airlines CEO Goh Choon Phong told Reuters.
But the European Union's top transport official said bloc's regulator, the European Aviation Safety Agency, reserved the right to carry out its own separate review at its own pace.
"Certainly EASA will take a very close look at the results (of proposed design changes) and then make a decision and that message was very clearly passed," Transport Commissioner Violeta Bulc told Reuters at the Seoul event.
"We always work together with other regulators and we certainly will take joint moves, but EASA will reserve the right to take an individual look at the results and then of course engage with the rest of the regulators."
Asked how long it would take to end the crisis, she said, "I hope as soon as possible, because we do need to restore order and trust and move on."
The 737 MAX crashes have thrown the spotlight on cockpit software and a certification system which relies on the US Federal Aviation Administration (FAA) delegating some approval tasks to Boeing staff working on their behalf.
Another report adds: The intensifying US-China trade war and rising fuel prices will continue to bog down airline profits this year, the International Air Transport Association said Sunday.
The warning came at the annual meeting of global airlines in Seoul, where it was revealed that 2019's collective net profit was forecast to be $28 billion, down from an outlook of $35.5 billion released in December.
The grim outlook was driven by rising costs across the board, including labour, fuel and infrastructure, the IATA said, adding the worsening trade war between the two world powers was not helping.
"Weakening of global trade is likely to continue as the US-China trade war intensifies," said IATA chief executive Alexandre de Juniac.
"This primarily impacts the cargo business, but passenger traffic could also be impacted as tensions rise," he added.
The world's top two economies have been locked in a trade war since last year, swapping tit-for-tat duties on hundreds of billions of dollars worth of goods and sending markets into a tailspin.
The fallout has reached far beyond their shores, with manufacturing in many export-dependent Asian economies taking a hit.
Brian Pearce, chief economist at the IATA, forecast "zero growth at best" for air cargo traffic this year, noting the impact of the trade tariffs imposed in the first half of 2018.
The Asia-Pacific region, which accounts for around 40 per cent of global air cargo traffic, was "clearly under pressure", he added.
"Cargo is such an important feature that the weakness in trade and the risk surrounding trade will mean profitability will be weaker in this region," Pearce said.
He painted a "mixed picture" for the region, noting that Asian countries -- notably India and China -- will lead a "reasonable" five-percent global growth in the passenger business.