Boeing Faces First Lawsuit from 737 Max Customer (excerpt)
(Source: Financial Times; published Aug. 27, 2019)
By Sylvia Pfeifer and Patti Waldmeir
A Russian aircraft leasing company is suing Boeing for breach of contract in connection with its grounded 737 Max in what is the first lawsuit brought against the US manufacturer by a customer over the safety crisis.
Avia Capital Services, a subsidiary of Russian state conglomerate Rostec, claims two deadly crashes were due to the “negligent actions and decisions of Boeing” not just in designing a plane that was “defective” but also in “withholding critical information” from the US aviation safety regulator during certification.
The complaint, which was filed in Cook county circuit court in Chicago on Monday, claims that Boeing “intentionally” failed to disclose information about the airworthiness of the Max to its customers, including Avia, in order to induce them to buy the aircraft.
Avia ordered 35 Max 8 jets from Boeing before they were grounded worldwide in March, and now it wants the order cancelled. The company says it gave Boeing a cash deposit of $35m to secure the order, and is asking for that amount to be returned with interest, along with $75m in lost profits for a total of $115m in compensatory damages, plus “several times the amount” in punitive damages.
Avia’s lawyer, Steven Marks of the Miami aviation law firm Podhurst Orseck, told the Financial Times in an interview that Boeing had offered compensation but it was inadequate. He said other Boeing customers had been in touch with him about bringing similar lawsuits. The Chicago-based aircraft manufacturer has been negotiating compensation deals with customers and it took a $4.9bn charge in the second quarter for that purpose. (end of excerpt)
Click here for the full story, on the FT website.
Rostec Ready to Negotiations on Costs Compensation Under Contract with Boeing
(Source: TASS; published August 27, 2019)
MOSCOW --- Avia Capital Services (ACS), a subsidiary of the Russian state corporation Rostec, is ready for negotiations with US Boeing on compensation of costs due to postponement of deliveries of 35 Boeing 737 MAX 8 passenger jets, a company’s spokesperson told TASS on Tuesday.
"Initially fixed supply dates for airliners were regrettably postponed for known reasons for three years, from October 2019 to March 2022. We at the same time made upfront payments and sustain losses. If the management of Boeing shows goodwill, we are ready to sit down to talk and find a mutually beneficial off-court decision on compensation of sustained losses," the spokesperson said.
Financial Times reported earlier today that Avia Capital Services filed a lawsuit to the District Court of the Cook Country, Chicago, against Boeing, alleging that the corporation deliberately concealed information about airworthiness of Boeing 737 MAX 8 aircraft. Flights of these jets are currently suspended worldwide.
According to the newspaper, ACS ordered 35 jets of this series prior to suspension of 737 MAX 8 flights and now insists on cancellation of the deal.
Avia Capital Services (ACS) confirmed filing the claim against US Boeing to terminate a contract on supply of 35 Boeing 737 MAX passenger jets, a company’s spokesperson told TASS on Tuesday.
"We confirm," the spokesperson stated.
On March 10, the Boeing 737 MAX 8 of the Ethiopian Airlines crashed in Ethiopia, killing 157 people. The crash of a similar model aircraft occurred on October 29 last year in Indonesia, then 189 people died. After the crash in Ethiopia, many countries, including Russia, the US, and the EU states, suspended the operation of the Boeing 737 MAX for safety reasons.
The Boeing company expressed confidence in the safety of the aircraft of this series, but stated that it understands the decision of regulators to suspend flights.