VietJet Weighs Its $25 Billion Boeing Jet Order: 737 Max Update

(Bloomberg) -- The global standoff over the airworthiness of Boeing Co.’s 737 Max jet intensified as U.S. regulators reiterated their support for the aircraft, even after the European Union and other authorities issued blanket bans.

Investigators are still trying to understand why an Ethiopian Airlines 737 Max 8 crashed near Addis Ababa on March 10, killing 157 people, less than five months after an identical Lion Air plane plunged into waters off Indonesia.

Key Developments:

• VietJet will decide on future plans for 200 737 Max jets on order after probe
• Ethiopia will send flight recorders to an unknown destination
• Norwegian says it will seek compensation
• Hong Kong, Lebanon, Thailand impose temporary bans on the 737 Max

Where the Boeing 737 Max Is Grounded

Here are the latest developments (time stamps are local time in London):

VietJet Order (10:51)

The Asian carrier, which has 200 737 Max planes on order valued at about $25 billion before standard discounts, says it will decide on future plans for the aircraft after aviation officials finish their investigation and issue a conclusion on incident.

“Vietjet has well managed our fleet so far and our transport business plans are unchanged.”

Black Boxes

Voice and data recorders from the downed Ethiopian Airlines will be sent abroad, a spokesman for the carrier said by phone. The company doesn’t know where, and said the transport ministry will provide the information.

Norwegian Wants Compensation (10:00)

Norwegian Air Shuttle ASA, the biggest European operator of the Boeing 737 Max, said it will ask Boeing Co. to cover the costs of the plane’s grounding.

“It is obvious that the costs incurred by the temporary grounding of brand new aircraft should be covered by those who have made the airplane,” the company said in an emailed statement. “We have not made any cost calculations at this time as our main priority is to ensure that affected passengers are being taken care of in the best possible way.”

DNB analysts have estimated a potential cost of between 5 million kroner ($580,000) and 15 million kroner per day for Norwegian.

China’s Clout (8:12 a.m.)

In grounding the 737 Max, centuries-old American allies including the U.K. and Australia broke convention by snubbing the U.S. Federal Aviation Administration, an authority that has defined what’s airworthy -- and what’s not -- for decades. New Zealand, the United Arab Emirates and Vietnam on Wednesday became the latest countries to block the 737 Max, helping legitimize China’s early verdict on March 11 that the plane could be unsafe.

"The FAA’s credibility is being tested," said Chad Ohlandt, a Rand Corp. senior engineer in Washington. "The Chinese want their regulatory agency to be considered a similar gold standard.”

Read more: Boeing Crash Isolates FAA as China Leads Push Against Max

Lebanon, Thailand

The 737 Max has been banned from Lebanese airport, airspace, NNA reports, while Thai authorities also followed suit.

Earlier:

Hong Kong

Hong Kong will impose a temporary ban on Boeing 737 Max aircraft over its airspace from 6 p.m., the Civil Aviation Department said in a statement.

India Expands Blockade

India will bar all Boeing 737 Max planes from entering or transiting in its airspace, extending an earlier ban that applied only to its airlines. The Directorate General of Civil Aviation said the aircraft will be allowed to fly until 4 p.m. local time to enable foreign-registered jets to return to their home base and for planes operating locally to go to a maintenance facility for parking. Aviation ministry and airline officials will also meet at 4 p.m. local time, according to the ANI news agency.

Crash Similarities

Ethiopian Airlines Chief Executive Officer Tewolde GebreMariam said in an interview with CNN that there are “substantial” similarities with the Lion Air crash in October involving the same Boeing plane model. The Ethiopian Airlines pilot had “flight control problems” shortly before the crash, GebreMariam said. In November, Indonesian investigators found that the Lion Air pilots battled multiple malfunctions almost as soon as their flight began.

Vietnam Suspends Jets

Vietnam suspended all Boeing 737 Max jets of its airlines starting 10 a.m. local time Wednesday, and said it won’t grant any operation permits for the aircraft until further notice. VietJet Aviation JSC, which doesn’t fly any 737 Max planes now but has 200 of the jets on order, will make a decision on its plans to use the aircraft after U.S. aviation officials finish their investigation, the Vietnamese airline said in a statement.

Russia’s S7 Grounds Planes

S7 Airlines suspended Boeing 737 Max flights from 00:01 Moscow time Wednesday until it receives detailed information on the latest crash, the carrier said on its website. The airline said it has two 737 Max planes in its fleet of 96 and the suspension won’t affect its schedule.

Sunwing Grounds Flights

Sunwing Airlines said it’s temporarily suspending its four Boeing 737 Max 8 jets "for evolving commercial reasons unrelated to safety including airspace restrictions being imposed by some of our partner destinations." The carrier is in the process of revisiting its flying schedule to accommodate the temporary removal of Max aircraft from service.

Blackbox to U.K. or U.S.?

Ethiopia wanted to send the flight-data and cockpit-voice recorders to the U.K.’s Air Accidents Investigation Branch to recover the data, causing U.S. investigators to hold intense behind-the-scenes talks to bring the remains to America, the Wall Street Journal reported, citing people familiar with the matter. U.S. officials wanted to have the recorders sent to the National Transportation Safety Board on grounds that American government experts would provide the most reliable and accurate data downloads, according to the report. The U.S. hadn’t received a final decision as of late Tuesday, according to the Journal.

Canada Holds Off

Canadian Transport Minister Marc Garneau told lawmakers he won’t hesitate to take action on Boeing if needed, but said it’s too early to determine the cause of the Ethiopian Airlines crash. “Our responsibility is to stay clear-minded to navigate this evolving situation,” he said, according to a statement obtained by Bloomberg.

FAA Support

Federal Aviation Administration acting chief Daniel Elwell said the agency continues to closely monitor an investigation into the fatal crash in Ethiopia and will take action if necessary. No other civil aviation authorities have given the FAA data that would warrant action, the agency said.

For more stories:

Lion Air Said to Plan Airbus Order Switch After Boeing 737 Crash
FAA Says Boeing 737 Max Still Airworthy Despite Second Crash
Back-to-Back 737 Crashes Have Few Parallels in Aviation History
Boeing Jet Woes Lead Analysts to Stress Caution After Crash
Ethiopia Finds Flight Recorders From Doomed Boeing 737 Max
What Is the Boeing 737 Max and Which Airlines Fly It?: QuickTake
Fearful Flyers Lose Faith in Boeing 737 Max After Second Crash
Two Short, Erratic Flights End in Tragedy: Could They Be Linked?
How Boeing’s 737 Max Went From Bestseller to Safety Concern

--With assistance from Anthony Palazzo, Abbas Al Lawati, Jihye Lee, Kyunghee Park, Kriti Gupta, Anurag Kotoky, Nancy Moran, Lena Lee, Angus Whitley and Benjamin Katz.

To contact the reporters on this story: Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net;Nizar Manek in Nairobi at nmanek2@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net;Young-Sam Cho at ycho2@bloomberg.net

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