Ethiopian Airlines expects June settlement of compensation-claim with Boeing over grounded 737 MAX

Ethiopian Airlines Boeing 737 MAX ©AirTeamImages

Ethiopian Airlines’ (Ethiopian) chairman, Tewolde Gebremariam, has confirmed that he anticipates the settlement of a compensation package with Boeing in relation to lost revenue owing to the grounding of the 737 MAX after the crash of one of the jets belonging to Ethiopian in March 2019.

 “We have invited Boeing to discuss compensation. It’s compensation for the grounded MAX … there is also compensation for delayed delivery of the MAX that was supposed to come and loss of revenue,” Tewolde said in an interview, adding that he expects compensation to be agreed by the end of June when its fiscal year closes. Boeing has not commented on the situation other than to say that the company is working closely with Ethiopian and hopes “to reach a fair and reasonable outcome.”

Ethiopian currently has four grounded MAX planes in its fleet and has taken delivery of five of the jets of a 30-plane order, including the MAX that crashed. The compensation sought relates only to financial losses incurred as a consequence of the grounding of the 737 MAX and does not relate to the crash itself. Ethiopian has decided not to pursue a lawsuit against Boeing for the accident as the American planemaker remains a “partner” and Ethiopian uses many of its planes. As a result, compensation may come in the form of cash or plane parts.

Ethiopian has posted a first-quarter 2020 loss of US$55o million but Tewolde does not anticipate having to approach the Ethiopian government for financial assistance. The carrier has converted 22 of its passenger jets to cargo planes to generate revenue while demand for air travel has all but dried up.

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