Boeing cuts production of 737 MAX after crashes

The US Federal Aviation Administration plans to revamp oversight of airplane development after the two deadly crashes of Boeing's new 737 Max 8

American Airlines is extending by over a month its cancellations of about 90 daily flights as the troubled 737 Max plane remains grounded by regulators.

The two recent crashes of the 737 Max forced Boeing to cut production of its most popular passenger jet. American said it is still waiting for more information from the Federal Aviation Administration, Department of Transportation, National Transportation Safety Board and other regulatory authorities before resuming flights.

The airline had originally canceled Boeing 737 MAX 8 flights through to April 24th.

Boeing's plan to cut its 737 jetliner production by 19 percent this year is expected to have negative spillover effects across the aerospace industry, from parts suppliers to engine makers and even airlines.

American Airlines said it was now awaiting information from the manufacturer and regulating authorities including the Federal Aviation Administration (FAA), Department of Transportation (DOT) and, National Transportation Safety Board (NTSB) to resume operations of the aircraft. It was the second crash of a Boeing 737 Max jet in five months.

BAC analyst Ronald Epstein said that he now expects normalization in deliveries of 737 Max series planes to take six to eight months, which is way higher than his earlier projection of three to six months.

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"By proactively canceling these flights, we are able to provide better service to our customers with availability and rebooking options", an American spokesperson said in a statement.

"Boeing could incur liabilities related to certification and testing costs, late delivery penalty to airlines, lives lost from the Ethiopian Airlines flight ET 302 and Lion Air flight JT 610, and production disruption penalties to suppliers", the note said.

"We have made a decision to temporarily move from a production rate of 52 airplanes per month to 42 airplanes per month starting in mid-April", CEO Dennis Muilenburg said in a statement Friday.

Preliminary reports into accidents in Indonesia and Ethiopia found that faulty sensor readings erroneously triggered an anti-stall system that pushed the plane's nose down. Pilots of each airplane struggled in vain to regain control. A total of 346 people died in the accidents.

Families of 11 Lion Air sufferers said at a news conference arranged Ponto by Jakarta law company Kailimang & that they're joining dozens of Indonesian households in filing lawsuits against Boeing. Cowen aerospace analyst Cai von Rumohr said he now believes Boeing won't be able to make deliveries to U.S. airlines - American, Southwest Airlines and United Airlines - until June.

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