American Airlines holds first civilian passenger flight of 737 MAX in nearly two years

American Airlines holds first civilian passenger flight of 737 MAX in nearly two years
American Airlines is seeking to prove Boeing’s 737 MAX aircraft is safe for passengers after being grounded after two crashes five month apart. (AFP file photo)
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Updated 02 December 2020

American Airlines holds first civilian passenger flight of 737 MAX in nearly two years

American Airlines holds first civilian passenger flight of 737 MAX in nearly two years
  • Part of a PR effort by the planemaker and airlines to rehabilitate the jet’s image
  • A smooth return to service for the MAX is seen as critical for Boeing’s reputation and finances

DALLAS: Boeing’s 737 MAX on Wednesday will make its first public demonstration flight with members of the media since being grounded over fatal crashes, as one of its biggest customers, American Airlines, seeks to prove it is safe for passengers.
The flight from the airline’s base in Dallas, Texas, to Tulsa, Oklahoma, comes weeks before the airline’s first commercial flight on Dec. 29, and is part of a PR effort by the planemaker and airlines to rehabilitate the jet’s image following a record 20-month ban.
Boeing said it had no comment on the American flight and that it would not have staff aboard. The planemaker has said that airlines will take a direct role in demonstrating to passengers that the 737 MAX is safe.
Boeing’s best-selling jet was grounded worldwide in March 2019 after two crashes five months apart killed a combined 346 people, marking the industry’s worst safety crisis in decades and a huge setback for US aviation regulatory leadership.
Wednesday’s flight marks the first time anyone besides regulators and industry personnel have flown on the MAX since the grounding. Last month, the US Federal Aviation Administration cleared it to fly. Brazil’s Gol Linhas Aereas Inteligentes is planning a similar high-profile event for the redesigned MAX this month, with cautious hopes to fly its first commercial flights as soon as next week, a representative said.
A smooth return to service for the MAX is seen as critical for Boeing’s reputation and finances.
The US planemaker is bracing for intense publicity from even routine glitches by manning a 24-hour “situation room” to monitor every MAX flight globally, and has briefed some industry commentators on details on the return to service, industry sources said.
Airlines and leasing companies have spent hundreds of billions of dollars buying the latest upgrade of the 737, the world’s most-sold aircraft.
But families of some of the crash victims in Indonesia and Ethiopia have protested the return to service, saying it is premature before a final investigative report on the second crash has been released.
The PR efforts are designed to highlight software and training upgrades which the FAA has said remove any doubt about the plane’s safety.
Boeing toned down its original plans for the plane’s eventual return as the crisis dragged on longer than executives expected, scrapping a high-profile publicity campaign which had included a ceremony in the Seattle area and a tour using an Oman Air 737 MAX, industry sources said.
A Boeing representative declined to comment.
Meanwhile, in a vote of confidence, airlines are stepping in to place orders for the MAX, with Alaska Airlines agreeing to lease extra MAX jets last week, and Ireland’s Ryanair expected to top up MAX orders as early as this week.


WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range
Updated 31 min 23 sec ago

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Oil prices have been stable since early January, with Brent crude price hovering around $55. Brent crude closed the week slightly higher at $55.41 per barrel,
while West Texas Intermediate (WTI) closed slightly lower at $52.27 per barrel.

Oil price movement since early January in a narrow range above $50 is healthy, despite pessimism over an increase in oil demand, while expectations of US President Joe Biden taking steps to revive energy demand growth are
still doubtful. The US Energy Information Administration (EIA) reported a hike in US refining utilization to its highest since March 2020, at 82.5 percent. The EIA reported a surprise weekly surge in US commercial crude stocks by 4.4
million barrels. Oil prices remained steady despite the bearish messages sent from the International Energy Agency (IEA), which believes it will take more time for oil demand to recover fully as renewed lockdowns in several countries weighed on oil demand recovery.

The IEA’s January Oil Market Report came as the most pessimistic monthly report among other market bulletins from the Organization of the Petroleum Exporting Countries (OPEC) and EIA. It forecast oil demand will bounce back to 96.6 million bpd this year, an increase of 5.5 million bpd over 2020 levels.

Though the IEA has lowered its forecast for global oil demand in 2021 due to lockdowns and vaccination challenges, it still expects a sharp rebound in oil consumption in the second half of 2021,
and the continuation of global inventory depletion.

The IEA reported global oil stocks fell by 2.58 million bpd in the fourth quarter of 2020 after preliminary data showed hefty drawdowns toward the end of the year. The IEA reported OECD industry stocks fell for a fourth consecutive month at 166.7
million barrels above the last five-year average. It forecast that global refinery throughput is expected to rebound by 4.5 million bpd in 2021, after a 7.3 million bpd drop in 2020.

The IEA monthly report has led to some short term concern about weakness in the physical crude spot market, and the IEA has acknowledged OPEC’s firm role in stabilizing the market.

Controversially, the IEA believes that a big chunk of shale oil production is profitable at current prices, and hence insinuated that shale oil might threaten OPEC market share.

It also believes that US shale oil producers have quickly responded to oil price gains, winning market share over OPEC producers. However, even if US shale oil drillers added more oil rigs for almost three months in a row, the number of operating rigs is still less than half that of a year ago, at 289 rigs.

The latest figures from the Commodity Futures Trading Commission show that crude futures “long positions” on the New York Mercantile Exchange are at 668,078 contracts, down by 18,414 contracts from the previous week (at 1,000 barrels for each contract).