Ethiopian Airlines expects a settlement with Boeing by end of June over the crash of a 737 MAX plane in March 2019, the business’ CEO has told Reuters.
Tewolde GebreMariam said, “We have invited Boeing to discuss compensation for the grounded MAX. There is also compensation for delayed delivery of the MAX that was supposed to come and loss of revenue.”
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.
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, GebreMariam 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 passenger 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 per cent of our revenue, but at this time when the passenger revenue is almost gone we are only surviving on cargo,” GebreMariam 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, had been delayed. Ethiopian made a loss of $550 million between January and April, but GebreMariam ruled out seeking a bailout from the Ethiopian government.
