DGCA lifts ban on Boeing 737 Max Aircraft
In a significant move for Indian aviation, the Directorate General of Civil Aviation (DGCA) has lifted the ban on Boeing 737 Max aircraft. These aircraft can start flying again right away. The DGCA had imposed a ban on flying these aircraft in March 2019 after two fatal accidents were reported due to faulty design of the aircraft.
Lifting of the ban was long overdue since 175 countries had allowed the Boeing 737 Max to fly again. The DGCA has expressed satisfaction that requisite conditions were met by the 737 aircraft and was fit to fly again. With India also approving the Boeing Max 737 in Indian skies, China remains the only major aviation market to still ban the Max 737.
The ban on Boeing 737 Max aircraft had been imposed by DGCA after the fatal crash of the 737 Max flown by Ethiopian Airlines in Mar-19. All 157 persons on board, including 4 Indians, were killed in the crash. Earlier, in Oct-18, a similar aircraft flown by Lion Air had crashed in Indonesia leaving 189 dead. In both cases, the automatic safety system had been triggered leading the plane to nosedive.
In India, the largest and only major customer for the Boeing 737 Max Aircraft is SpiceJet. It has a pipeline of more than 100 aircraft on order and flies the 737 extensively across India. The impact was immediately visible in the stock price of SpiceJet, which rallied 4% after the lifting of the ban was announced by the DGCA.
It resolves another major problem for SpiceJet with respect to its Irish Lessor, Avolon, that leased these Max Aircraft to SpiceJet. Most aircraft lease contracts are covered by the “Hell or High Water” clause, under which lease rentals are payable even in the face of Force Majeure conditions. Now SpiceJet has entered into an agreement with Avolon to resume operations and puts SpiceJet on safer ground.
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