Operators and owners of Boeing 737 Max aircraft face further costs following Sunday's announcement by the FAA, which raised new problems with the beleaguered aircraft, this time relating to leading edge slat tracks installed on 179 Max aircraft and 133 older 737 NG aircraft. Operators have been advised by Boeing to inspect potentially affected aircraft for specific lot numbers and to replace any impacted parts. The FAA has ordered impacted operators to inspect and replace within 10 days.
Whether affected operators might have recourse to Boeing for the resultant costs depends on the terms of their contract, if any, with Boeing. Similarly, lessees should consult the terms of their lease arrangements although, in the vast majority of cases, responsibility for rectification is likely to fall to the lessee, rather than the lessor.
For those who have the Max 8 on order, whether they can, as a matter of law, cancel those orders depends on the terms of their order contracts with Boeing. An express term dealing with the current situation, or a "passenger loss of confidence", the reason cited by Garuda in its request to cancel its forward orders made earlier this year, is unlikely, but airlines may find assistance from more general provisions on cancellation/termination, delay, compliance with regulations etc.
Any customer faced with a similar situation, where issues with components installed on owned or leased assets have arisen, or where post-order events or changes in circumstances make continuance with an order unattractive, should consider their position, both contractually and commercially, as soon as possible and, where appropriate, seek advice and assistance on the options that might be available to them.
Lindsey is a partner in Freeths dispute management and avoidance team, specialising in complex cross-border disputes, international and domestic arbitration, aviation, commercial and finance disputes. In addition to disputes work, Lindsey uses her expertise to assist clients with contractual drafting, interpretation, enforcement, termination, renegotiation and amendment, ongoing contract management and risk avoidance. Lindsey has particular expertise in aircraft leasing and finance, representing both operators and lessors in a number of high profile cases, including the most recent Commercial Court consideration of the doctrine of estoppel in the context of aviation leasing.
FAA highlights new flaws in Boeing 737 Max planes Wing parts on more than 300 aircraft may have been incorrectly manufactured The 737 Max is grounded around the world following two fatal crashes The US Federal Aviation Administration on Sunday highlighted new problems with some of Boeing’s 737 Max jets and an older model, saying that certain parts on more than 300 aircraft may not have been properly manufactured.