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Ethiopian Airlines CEO Expects Settlement With Boeing By End Of June

Rescue workers are seen at the scene of the Ethiopian Airlines Flight ET 302 plane crash, near the town of Bishoftu, southeast of Addis Ababa, Ethiopia March 10, 2019. REUTERS/Maheder Haileselassie

Ethiopian Airlines expects a settlement with Boeing by end of June over the crash of an 737 MAX plane in March 2019, CEO Tewolde Gebremariam told Reuters.

Ethiopian Airlines flight 302 bound for Kenya crashed six minutes after take-off from the capital Addis Ababa, killing all 157 passengers and crew.

“We have invited Boeing to discuss compensation. It’s compensation for the grounded MAX… there is also compensation for delayed delivery of the MAX that was supposed to come and loss of revenue,” he said.

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“By the end of June, which is the end of our fiscal year, we should have something…meaning compensation.”

The airline is also asking Boeing to compensate it for the accident’s “impact on the brand”, Tewolde said.

Boeing said in a statement that it does not comment on its arrangements with particular customers but will continue to work closely with Ethiopian Airlines and others “to reach a fair and reasonable outcome.”

Ethiopian, Africa’s largest airline, has decided not to pursue a lawsuit against Boeing over the 737 MAX crash as it remains a “partner” and Ethiopian uses many of its planes, he said, adding the settlement could be in form of cash or supplies of plane parts.

He did not say how much compensation the airline, with four MAX planes in its fleet, was seeking or how many planes it has on order.

The global aviation industry is at a virtual standstill due to the coronavirus pandemic, forcing airlines that were once eager for new jet deliveries to grow their networks to scale back their flying schedules and park planes.

To help it overcome a drastic downturn in passenger revenues, Tewolde said his airline has converted 22 passengers planes to cargo aircraft, stripping out all seats.

“Normally cargo would make 15 percent of our revenue, but at this time when the passengers’ revenue is almost gone we are only surviving on cargo,” he said.

Demand for cargo has grown mainly to transport personal protective equipment and medical supplies to tackle the virus.

So far Ethiopian had not cancelled any jet purchases despite the collapse in air travel, though several orders, including some from Boeing and Airbus, had been delayed, he said.

Ethiopian made a loss of $550 million between January and April, but Tewolde ruled out seeking a bailout from the Ethiopian government.

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Written by PH

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