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Time to retire the 737 – an Aircraft Insurance Perspective

No need to go into the specifics, for any interested party on the 737-Max saga we know that it is the result of overextending a 50 year design to appease investors, customers, and other stockholders.

The Max grounding is now crossing it’s 1 month anniversary. In a previous post we calculated the Aircraft Insurance claim for this grounding would be approximately $45M less fixed costs. Our guess is that each day that passes is $25M incurred in the Aircraft Insurance claim. That’s $750M incurred thus far.

But it’s just not the Aircraft Insurance industry that is getting rocked. Our beloved American manufacturer Boeing is dealing with a crisis that is much deeper than correcting software issues for the Max. The media have argued that Boeing put many factors as priorities over safety.

President Trump has tweeted about the unfair advantage Airbus has over Boeing due to EU subsidies at an attempt to level the playing field. Whether subsidized by the government or at the cost of Boeing share price – they need to design a new light airliner to compete with the A320, improve safety, bring modern safety automation to its pilots, and prevent future Aircraft Insurance claims of such magnitude.