Russian Firm Sues Boeing Over Max Jet Issue

A Russian aircraft leasing company confirmed last Tuesday that it filed a lawsuit against Boeing. Avia Capital Services, a subsidiary of Russian conglomerate, Rostec, highlighted the hidden defects in the aircraft after it was grounded following two tragic accidents earlier this year.

“Rostec and Boeing are solid partners, with a time-proven and stable relationship. The company is closely following the situation with Avia Capital Services and is ready to help the parties come to a compromise. We hope that the issues raised can be resolved through dialogue.” said Rostec executive director Oleg Yevtushenko.

The lawsuit by Avia Capital Services is the first one ever filed by a Max customer against the multinational aerospace giant. The company insisted that Boeing had breached the contract, committed fraud by the faulty design and construction of the aircraft, and by convincing the Federal Aviation Administration to approve it.

It was reported that Avia Capital Services claimed Boeing had intentionally failed to disclose relevant information about the jet’s flying capabilities. The company also accused Boeing of selling defective aircraft. Just this year, almost 400 Max jets have been grounded since the fatal crashes of Lion Air in October 2018 and Ethiopian Airlines in March 2019 that claimed 346 lives.

Avia originally requested for Max jets in 2012. They were expecting to receive the jets this year. However, deliveries were delayed. The damages incurred have to amount to $115 million. According to a lawyer named Steven Marks, this included the $40 million deposit and $75 million in lost profit.

Avia lawyer Marks is reaching out to families of the crash victims to join the Avia lawsuit. Paul Njoroge, a family member of the victims, stated that Boeing should scrap the 737 Max. He also added that top executives should resign and face criminal charges for not grounding the aircraft after the incident in October 2018. Njoroge’s family was killed when a 737 Max crashed in Ethiopia.

Following the October incident involving Indonesian Lion Air, Boeing issued a bulletin to pilots on handling nose-down pitch of the plane. In the Ethiopian crash, a Boeing executive insisted that the pilot did not follow the procedure. However, a preliminary report revealed that the pilot executed all necessary procedures until the end.

It has been revealed that the size and placement of the aircraft’s engines increased the risk of an aerodynamic stall. Boeing designed a flight control software, MCAS, and it was later reported that the software pushed the nose of the plane down in both crashes. Unfortunately, Boeing did not inform pilots about the MCAS until after the first crash.

Authorities around the globe have ceased flights involving the Boeing air carrier. Even Air Canada faces a tough third quarter in light of the 737 Max issue. The company recently announced that it will remove the plane from schedules until January, expressing a drop in capacity for the busiest travel periods of the year.

“The 737 Max grounding will be felt more acutely in our very busy summer period. Already we’re using our fleet as efficiently as is possible with the maximum number of hours per day but it’ll be more challenging,” said chief executive Calin Rovinescu.

Before the grounding of Boeing planes, the company was expecting 12 Max 8s this year and another 14 by 2020. Air Canada has stopped hiring pilots and cabin crews until the issue is resolved.

“As a result of this and other operational factors, it will take up to a year from the time when a decision is made to integrate them into our fleet after the ungrounding for all 50 planes to fly,” affirmed Rousseau.

As of the second quarter, Boeing has already lost $3 billion. This resulted from the $4.9 billion after-tax charges for future costs to pay damages to Max clients and airlines. So far, the company has expressed that it has suffered its biggest quarterly loss in two decades.

Boeing is planning to upgrade the flight control software associated with the crashes. The company expects its aircraft to be cleared to fly by November.

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