Flydubai may weigh option to replace 737 MAX; demands compensation from Boeing

April 30, 2019

Flydubai may weigh an option of replacing its order of more than 100 Boeing 737 MAX jets with Airbus A320neos, and further demand compensation from the US plane-maker for the loss incurred following the grounding of 14 narrow-body aircraft, Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the low-cost carrier said on Monday.

Speaking at the Arabian Travel Market, Sheikh Ahmed, who is also Chairman of Dubai Airports and Chairman and Chief Executive of Emirates Airline and Group, said the airline had to cancel up to 15 flights a day after grounding almost 10 per cent of its fleet.

Most airlines across the world grounded 737 MAX after an Ethiopian Airlines jet crashed in March and a LionAir jet crashed last October, killing a total of 346 people.

Sheikh Ahmed did not say when flydubai would exercise the option for replacing the order nor did he reveal how much was the compensation flydubai would demand from Boeing.

The Dubai-based carrier operates a fleet of only 737 aircraft and is one of the largest MAX operators having ordered 250 of the plane in November 2017 in a deal valued at $27 billion. With so much aircraft on order, he said he couldn't 'sit and do nothing' but needed to look at options such as the Airbus A320.

He stressed the replacement option and compensation are flydubai's rights.

'We didn't ground those aircraft just because we wanted to. Even if we wanted to fly this aircraft, it would not be possible as nobody will allow it to fly within their airspace.'

Sheikh Ahmed said he expects the US planemaker to improve communication with customers. 'We do not have a definite idea about the date when MAX aircraft will be flying again.'

On Boeing's claim that it is developing a software fix and new pilot training for regulatory approval to get MAX recertified, Sheikh Ahmed said there was lack of clarity about those fixes and how long the plane grounding will last.

'I have to see when this aircraft will be flying again and what assurances we will be getting, and how much compensation we will get. I don't want the delay to continue,' he said.

On the higher fuel price and its impact on the airline's profitability, he said several other factors, including geopolitical issues, are posing challenges of all operators, but the full year 2018 results would be positive for the group. 'However, I would like to see oil prices at $60,'

On the status on the talks with India to boost bilateral seat quota, Sheikh Ahmed said he expects to get more capacity, but did not say when a new agreement could be inked.

On Airbus 380 aircraft - of the world's largest commercial jet-liner - of which Emirates is the largest operator in the world, he said although its production would cease, the plane would continue to be operational for another 15 years. 'We are today at 107 aircraft, it will go up to 125 before we see that some of the older aircraft come out of the fleet,' he said.