b'12American Journal of Transportation ajot.comAir C ArgoAir CArgoNEWSnewsUnited, American amongBoeing snubs Seattle to consolidate 787 output in South Carolinacarriers taking Covid loans Boeing Co. is uprooting the 787 Dream- consolidation also raises doubts about the liner program from a storied manufacturingfuture of Boeings mammoth wide-body AmericanAirlinesGroupInc.andleaving more federal bailout money forhub north of Seattle and shifting the work tofactory in Everett, a plant that was carved United Airlines Holdings Inc. are amonga smaller number of carriers to tap. Thea non-union plant in South Carolina amidout of marsh and forest in the 1960s to seven carriers taking federal loans that areTreasury Department limited the funds toslumping sales of wide-body jetliners. house production of the 747 jumbo jet.capped at $7.5 billion apiece, the Treasuryno more than 30% of the total program forProduction of the marquee twin-aisleIt became clear that consolidating to Department announced. an individual carrier. jetlinerwillbeconsolidatedinNortha single 787 production location in South AcceptingfederalloansisseenasThe airline industry is not expecting aCharleston in mid-2021 by the companysCarolina will make us more competitive alastresortifnootherfundingcomesrebound anytime soon. American sees thirdbest estimate, Boeing said in a statement.and efficient, better positioning Boeing to throughbecauseofthegovernmentsquarter revenue down 75% from a year ear- Theplanemakerdidntdisclosehowweather these challenging times and win restrictions. Companies accepting federallier, and a 65% drop in the fourth quarter. many jobs it intended to cut, saying it isnew business, Stan Deal, head of Boe-loans are required to put a cap on execu- Airlines seeking the loans had untilstill assessing the potential impact on itsings commercial airplane division, said tivecompensationofferequityorotherthe Sept. 30 to finalize the terms with thefactory complex in Everett, Washington,in a message to employees.financialstakestothegovernmentinTreasury Department. where it employs about 30,000 people. Inmakingthedecision,Boeing exchange for the aid. TheCovid-19pandemichasravagedThe move bolsters Boeings decade- weighedlogistics,efficiencyandthe Nearly all major airlines signed lettersthe airline industry, with Treasury Secretarylong expansion in South Carolina, whichlong-termhealthofourproduction of intent in July to tap the $25 billion loanSteven Mnuchin repeatedly saying that it ishoststhecompanysonlyfinaljetlinersystem,amongotherconsiderations, fund carved out in the Cares Act to help anamong the few parts of the economy thatassemblylineoutsideitscentury-oldDeal said. The coronavirus pandemic has industry reeling from the pandemic. urgently needs additional federal support. baseinWashingtonstate. Asthecom- devastatedthecompanyssalesoutlook TheTreasuryDepartmentdidnotMnuchinsteamearlierthisyearpany braces for years of weak orders, the(SNUBScontinued on page 14)layout how much each carrier is borrow- doled out funds from a separate part of ing.Americanannouncedearlierthatitthe Cares Act called the Payroll Support will take a $5.48 billion loan backed by itsProgram. In exchange for a share of theHouse bill takes aim at FAAs delegation loyalty program. Thats increased from an$25 billion funds, which was given as a original proposal to take $4.75 billion, untilcombinationofloanandgrantmoney,to Boeing of oversightother airlines found financing elsewhere. companiespromisednottofurloughor Alaska Airlines, Frontier Airlines, Jet- lay off employees until Sept. 30. Houselawmakersunveiledbiparti- nose into dives. Crashes off the coast of Blue Airways Corp., Hawaiian Airlines andAs many as 50,000 jobs are at stakesan legislation to reform aircraft manu- Indonesia in October 2018 and in Ethio-SkyWest Airlines also accepted the loans. if the government cannot extend that pro- facturing in the wake of the Boeing Co.pia in March 2019 that killed 346 people SouthwestAirlinesCo.,DeltaAirgram, according to White House chief of737 Max disasters, an effort that wouldwere blamed in part on the system.Lines Inc. and others opted not to becausestaff Mark Meadows, who met with air- partiallyundoeffortsoverdecadestoThe House legislation isnt intended they found financing in private markets,line executives earlier this month. streamline aviation-industry approvals. toendthecontroversialprogramthat The measure would tighten the Fed- allowstheFAAtodeputizecompany eral Aviation Administrationscontrolofemployees to sign off on designs, but it programs at Boeing and other companiesgives the agency more authority over who American, United to cut combinedthat allow employees to sign off on aircraftcompanies pick for such duty.designs, and would also require an expertThatisareversalofmorethana 32,000 jobs amid US aid talks panel to review Boeings safety culture. decade of actions by Congress that directed The missteps that led to crashes ontheFAAtoexpandsuchprograms. The AmericanAirlinesGroupInc.andaid of $25 billion expired at the end of thethe Max alarmed and outraged lawmak- aviationindustryhadarguedbeforethe United AirlinesHoldingsInc.willstartday. House leaders postponed a vote on theers,saidRepresentativePeterDeFazio,Max crashes that it needed more authority laying off thousands of employees as orig- stimulus plan to give Pelosi more time totheOregonDemocratwhoischairmanto approve designs in order to remain com-inally scheduled, spurning an appeal fromhammer out a compromise with Mnuchin. oftheTransportationandInfrastructurepetitive in other parts of the world.Treasury Secretary Steven Mnuchin as heUnited said it had made clear to theCommittee.ThebillisanattempttoThelegislationwouldalsorequire negotiates with Congress about extendingTrumpadministration,Congressandmeaningfully address the gaps in the reg- the adoption of better safety-management payroll support for U.S. carriers. labor unions that it can and will reverseulatory system for certifying aircraft andsystemsatmanufacturers,ensuremore Bothairlinesvowedtoreversethethe furlough process if additional aid isadopt critical reforms that will improverealistic assumptions about pilot reactions furloughs if the government agrees to pro- extended. But the outcome is uncertain. public safety and ensure accountability attoemergenciesandmandatedisclosure vide additional aid, according to memosThelayoffsaddtojoblossesthatall levels going forward. of flight-control systems that can alter a to workers issued by the carriers. Ameri- already total 150,000 at the nations fourThe bill is also backed by the com- planes flight path.can is furloughing 19,000, while United islargest carriers based on employees whomitteesrankingRepublican,Represen- Each of those was designed to address laying off about 13,000. have left voluntarily or taken temporarytative Sam Graves of Missouri, and theissues raised by multiple reviews after the The decision to move ahead with jobleave. Airlines have already reduced exec- leadersoftheaviationsubcommittee,crashes.cuts ramps up the pressure on Mnuchinutive pay, pared schedules and groundedincreasing its chances of passing.and House Speaker Nancy Pelosi as theyplanesasdomesticdemandlanguishesP ilotC onFuSionhaggle over a $2.2 trillion economic reliefat about 30% of year-ago levels. Interna- b iPArtiSAnS uPPort Whiletheinvestigationsintothe bill backed by Democrats. That includestional travel remains well below that. There appears to be strong support bytwo crashes focused on Boeings design, $25billioninpayrollaidforairlines,members of both parties for at least somequestions have also been raised about the whicharecontendingwithanunprec- C AShb urn action, but contentious pre-election poli- performanceofpilotsintheaccidents. edented collapse in travel demand causedEven with lower spending, the indus- tics and disputes over what such legisla- The bill would create what a press release by the coronavirus pandemic. try is losing billions monthly as costs out- tion should include could hinder passagecalled a call to action on pilot training Iamextremelysorrywehavepace revenue, and carriers have said theythis year. Its also supported by severalto assess pilot skills around the world.reached this outcome, American Airlineswill be smaller for several years. unions,includingthoserepresentingThedesignofwhatwasknownas Chief Executive Officer Doug Parker saidParker said that he was encouragedFAAs engineers and inspectors. ManeuveringCharacteristics Augmenta-in a letter to employees.by the progress of negotiations and wouldThe measure was prompted by twotion System was altered late in the Max be open to delaying furloughsbut onlycrashes of the best-selling 737 Max thatprogram to make it more aggressive, but if a political deal was on the verge of get- led to its grounding in March 2019. those changes werent understood by FAA ting done. Thelegislationwasreleasedastheengineersresponsibleforitsapproval. ParkersaidinaninterviewwithFAA and other global aviation regulatorsThe final sign-off on the design was done CNN. If its a situation where We needare nearing approvals to return the plane toby Boeing employees acting as deputies much more time to work and its unclearservice. FAA Administrator Steve Dicksonfor FAA.whetherwecangetsomethingdoneorplans to fly the plane this week in a demon- Thepotentialforpilotstobecome not, thats going to be much harder. stration meant to reassure the public. confused when the system failed wasnt Delta Air Lines Inc. will avoid mostDemocrats on the House committeetakenintoaccountbyBoeingorFAA, layoffsuntilatleastnextsummerafterearlier this month concluded an 18-monthaccording to several investigations.17,000 workers left voluntarily and 40,000investigation into what went wrong on theA similar Senate bill had to be with-took unpaid leaves. It remains in talks with737 Max design, finding fault with engi- drawnfromconsiderationbeforethe its pilots union about ways to reduce orneering failures, deception by Boeing andSenate Commerce, Science and Transpor-eliminateabout2,000furloughs.South- insufficient oversight by the FAA. tation Committee on Sept. 16 because of American Airlines CEo Doug Parker west Airlines Co. also has said it wont layA safety feature on the Max designeddisagreements over its details. A separate The Treasury secretary urged airlinesoff workers through the end of 2020 aftertoensureitscontrolsfeltthesameasHouse bill was introduced aimed specifi-earliertodelaylayoffsthatweresetto28% of its workforce agreed to leave per- onearliermodelswenthaywireintwocallyatimprovingassessmentsofhow begin when a previous round of payrollmanently or temporarily. crashes, repeatedly pushing down the jetspilots react to emergencies.'