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SRQLOT
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LOT sues Boeing over 737MAX

Wed Oct 27, 2021 4:58 am

Haven’t seen it in the threads yet, but LOT polish airlines decided to sue after long negotiations with Boeing.

Boeing balked at having to compensate as LOT was leasing the 5 737MAX aircraft. From the article “LOT is demanding compensation of no less than 1 billion zlotys ($252.76 million) The lawsuit was preceded by months of settlement negotiations that did not lead to an agreement, PAP reported.” The lawsuit was filed in Seattle. Not much more with this Reuters article, SimpleFlying just wrote about this lawsuit too using the Reuters article, but there are too many errors in it for me to use it.

https://www.reuters.com/business/aerosp ... 021-10-26/

Now EnterAir got money, I don’t remember if the 2 Maxes were leased or not? What kind of chances do you think LOT has at winning this? It did cause a lot of headaches for LOT having to lease so many other aircraft like older 737s and even Airbuses. Also surprised the lawsuit is filed in Seattle and not Chicago. Better chances for LOT as more people are bitter with Boeing slowing moving out of the area?
 
RoyalBrunei757
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 6:48 am

LOT couldn't catch a break, previously their 787 was twice grounded, one for global grouding due to battery issue then RR issue and now MAX grounding, although some countries have recertified it. Talk about double whammy......I don't see them running to Airbus anytime soon, most probably will kiss and make up with Boeing. Didn't they also cancelled last two B787 on order?
 
DaCubbyBearBar
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 7:01 am

LOT and Boeing have some making up to do. I don’t think this goes to trial
 
SRQLOT
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 7:49 am

RoyalBrunei757 wrote:
LOT couldn't catch a break, previously their 787 was twice grounded, one for global grouding due to battery issue then RR issue and now MAX grounding, although some countries have recertified it. Talk about double whammy......I don't see them running to Airbus anytime soon, most probably will kiss and make up with Boeing. Didn't they also cancelled last two B787 on order?



Yes the last 2 787s in the desert are not getting picked up as are the rest of the Maxes. So LOT will have done tough choices to make concerning the fleet simplification process that was being worked on.
 
panam330
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 8:18 am

They want compensation of $250m USD for 5 leased aircraft? Good luck.
 
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RyanairGuru
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 9:17 am

panam330 wrote:
They want compensation of $250m USD for 5 leased aircraft? Good luck.


Obviously they are going to high ball, Boeing will low ball, and they will settle in the middle before this goes to court. That’s how corporate litigation works, for better or worse. Regardless of whether they were leased or not, Boeing are responsible for LOT not being able to fly the planes they paid for so of course they will get something.
 
Flaps
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 10:52 am

RyanairGuru wrote:
panam330 wrote:
They want compensation of $250m USD for 5 leased aircraft? Good luck.


Obviously they are going to high ball, Boeing will low ball, and they will settle in the middle before this goes to court. That’s how corporate litigation works, for better or worse. Regardless of whether they were leased or not, Boeing are responsible for LOT not being able to fly the planes they paid for so of course they will get something.


If Boeing has already compensated the lessor than that is the end of their obligation. LOT's fight would then be with the lessor, not Boeing.
 
TokyoImperialPa
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 12:09 pm

Flaps wrote:
RyanairGuru wrote:
panam330 wrote:
They want compensation of $250m USD for 5 leased aircraft? Good luck.


Obviously they are going to high ball, Boeing will low ball, and they will settle in the middle before this goes to court. That’s how corporate litigation works, for better or worse. Regardless of whether they were leased or not, Boeing are responsible for LOT not being able to fly the planes they paid for so of course they will get something.


If Boeing has already compensated the lessor than that is the end of their obligation. LOT's fight would then be with the lessor, not Boeing.


But the lesser would then argue that fault was with Boeing surely?
 
sxf24
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 12:43 pm

TokyoImperialPa wrote:
Flaps wrote:
RyanairGuru wrote:

Obviously they are going to high ball, Boeing will low ball, and they will settle in the middle before this goes to court. That’s how corporate litigation works, for better or worse. Regardless of whether they were leased or not, Boeing are responsible for LOT not being able to fly the planes they paid for so of course they will get something.


If Boeing has already compensated the lessor than that is the end of their obligation. LOT's fight would then be with the lessor, not Boeing.


But the lesser would then argue that fault was with Boeing surely?


The lessor should then compensate LOT, likely by waiving rent during the grounding period and providing some other consideration. There is not an agreement between Boeing and LOT, which exposes the airline to risk when things go wrong.
 
FluidFlow
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 1:18 pm

sxf24 wrote:
TokyoImperialPa wrote:
Flaps wrote:

If Boeing has already compensated the lessor than that is the end of their obligation. LOT's fight would then be with the lessor, not Boeing.


But the lesser would then argue that fault was with Boeing surely?


The lessor should then compensate LOT, likely by waiving rent during the grounding period and providing some other consideration. There is not an agreement between Boeing and LOT, which exposes the airline to risk when things go wrong.


The question is what did LOT actually sue for? The only path to money I can see is fraud. LOT ordered the MAX through a lessor under the assumption they get a fully functioning "flawless" aircraft. In this circumstance the lessor is just the enabler. LOT got the max because Boeing convinced them it is the right aircraft. The lessor then provided said aircraft.
 
SRQLOT
Topic Author
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 3:17 pm

I guess I have 2 questions now. Do leasing companies have some kind of an agreement with manufacturers about any inservice issues or is it all on the leasee. And if an aircraft is grounded by the government who would be responsible for costs?
 
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REDHL
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 3:35 pm

From my point of view, it is very difficult for LOT to win that lawsuit because its entire MAX fleet is leased. Remember that having your own plane is not the same as having a leased one, since although the operator is the airline, the owner is still the lessor (Air Lease Corporation in this case). Therefore, the one who has the right to request compensation would be the lessor. If LOT had ordered planes directly from the factory like Enter Air did, then the story would have been completely different.
 
sxf24
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 3:52 pm

FluidFlow wrote:
sxf24 wrote:
TokyoImperialPa wrote:

But the lesser would then argue that fault was with Boeing surely?


The lessor should then compensate LOT, likely by waiving rent during the grounding period and providing some other consideration. There is not an agreement between Boeing and LOT, which exposes the airline to risk when things go wrong.


The question is what did LOT actually sue for? The only path to money I can see is fraud. LOT ordered the MAX through a lessor under the assumption they get a fully functioning "flawless" aircraft. In this circumstance the lessor is just the enabler. LOT got the max because Boeing convinced them it is the right aircraft. The lessor then provided said aircraft.


You can’t sue for fraud based on an assumption. LOT would need to prove Boeing made a promise that it failed to keep. In the absence of a contract between Boeing and LOT, that’s hard.
 
WayexTDI
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 4:18 pm

sxf24 wrote:
FluidFlow wrote:
sxf24 wrote:

The lessor should then compensate LOT, likely by waiving rent during the grounding period and providing some other consideration. There is not an agreement between Boeing and LOT, which exposes the airline to risk when things go wrong.


The question is what did LOT actually sue for? The only path to money I can see is fraud. LOT ordered the MAX through a lessor under the assumption they get a fully functioning "flawless" aircraft. In this circumstance the lessor is just the enabler. LOT got the max because Boeing convinced them it is the right aircraft. The lessor then provided said aircraft.


You can’t sue for fraud based on an assumption. LOT would need to prove Boeing made a promise that it failed to keep. In the absence of a contract between Boeing and LOT, that’s hard.

Boeing sold a product that they said was airworthy, when it was not; that's the failed promise.
 
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Polot
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 4:27 pm

WayexTDI wrote:
sxf24 wrote:
FluidFlow wrote:

The question is what did LOT actually sue for? The only path to money I can see is fraud. LOT ordered the MAX through a lessor under the assumption they get a fully functioning "flawless" aircraft. In this circumstance the lessor is just the enabler. LOT got the max because Boeing convinced them it is the right aircraft. The lessor then provided said aircraft.


You can’t sue for fraud based on an assumption. LOT would need to prove Boeing made a promise that it failed to keep. In the absence of a contract between Boeing and LOT, that’s hard.

Boeing sold a product that they said was airworthy, when it was not; that's the failed promise.

“Fraud” implies intent, ie Boeing was willing promising it was airworthy when they knew it wasn’t. If signed between the two crashes perhaps an airline can make that argument (some shareholders are suing Boeing for fraud for that reason, saying Boeing was knowingly downplaying/misleading them on the state/safety of the Max after the Lionair crash), but prior to the Lionair crash as far as Boeing was aware the Max was perfectly airworthy so its hard to argue they were committing fraud.
Last edited by Polot on Wed Oct 27, 2021 4:31 pm, edited 1 time in total.
 
sxf24
Posts: 1355
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 4:31 pm

WayexTDI wrote:
sxf24 wrote:
FluidFlow wrote:

The question is what did LOT actually sue for? The only path to money I can see is fraud. LOT ordered the MAX through a lessor under the assumption they get a fully functioning "flawless" aircraft. In this circumstance the lessor is just the enabler. LOT got the max because Boeing convinced them it is the right aircraft. The lessor then provided said aircraft.


You can’t sue for fraud based on an assumption. LOT would need to prove Boeing made a promise that it failed to keep. In the absence of a contract between Boeing and LOT, that’s hard.

Boeing sold a product that they said was airworthy, when it was not; that's the failed promise.


Boeing didn’t sell anything to LOT.
 
WayexTDI
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 9:52 pm

sxf24 wrote:
WayexTDI wrote:
sxf24 wrote:

You can’t sue for fraud based on an assumption. LOT would need to prove Boeing made a promise that it failed to keep. In the absence of a contract between Boeing and LOT, that’s hard.

Boeing sold a product that they said was airworthy, when it was not; that's the failed promise.


Boeing didn’t sell anything to LOT.

Boeing didn't operate Lionair Flight 610 nor Egyptair Flight 302; yet, Boeing was named a defendant in the lawsuit against them by the families of the victims. 2 reasons:
- Boeing is a huge company with deep pockets, so they will easily settle for a good chunk of change;
- Boeing did sell a product that was defective; hence is responsible for the crashes.
Just because you did not enter a contract with a manufacturer doesn't mean you cannot sue them: look at all the lawsuits against car manufacturers when no one buys their cars from the manufacturers themselves (exception made of Tesla). Those lawsuits were approved by the courts and went on.
 
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DarkSnowyNight
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Re: LOT sues Boeing over 737MAX

Wed Oct 27, 2021 10:19 pm

WayexTDI wrote:
- Boeing did sell a product that was defective; hence is responsible for the crashes.
Just because you did not enter a contract with a manufacturer doesn't mean you cannot sue them: look at all the lawsuits against car manufacturers when no one buys their cars from the manufacturers themselves (exception made of Tesla). Those lawsuits were approved by the courts and went on.


:checkmark:


Amazing that posters here are not seeing how basic this is. What is or is not in a contract that BCA had with a lessor or LOT is completely 100% irrelevant.

BCA built a defective product that eventually resulted in real harm to LOT. Full Stop.

Litigation works on the premise that an action or omission of action that through negligence —which BCA have heaps of here— causes material harm does expose the actor —again, BCA here— to liability. That the aircraft were sold to/through a third party is of absolutely no consequence whatsoever.


SRQLOT wrote:
I guess I have 2 questions now. Do leasing companies have some kind of an agreement with manufacturers about any inservice issues or is it all on the leasee.


The lessee is responsible for all MX outside of warranty, which in BCA's case is not at all comprehensive. Typically, OEMs will offer an MX package, but almost always lessees can find better deals elsewhere. As well, often times, they will pass those costs/responsibilities to the operator. This is why things like engine overhauls and MX intervals are dictated more by terms of lease than actual regulation in many cases.


RyanairGuru wrote:
panam330 wrote:
They want compensation of $250m USD for 5 leased aircraft? Good luck.


Obviously they are going to high ball, Boeing will low ball, and they will settle in the middle before this goes to court. That’s how corporate litigation works, for better or worse.


They will settle where they will settle. An artificial "middle" means nothing to either party. If LOT can show 252m worth of damage —which should not be difficult— then that is what they will get. No need to play nice there...

RyanairGuru wrote:
Regardless of whether they were leased or not, Boeing are responsible for LOT not being able to fly the planes they paid for so of course they will get something.


Absolutely. And I am not sure where this absurd notion that how the planes got there would have anything to do with anything. If you are driving your new Camry through the country side and a defect injures you, you are not prevented from litigation because it is a lease. Nothing different here.

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