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Airlines look to arid Australia to store Boeing 737 Max planes

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The grounding of the Boeing 737 Max aircraft in March cost the manufacturer and the airline industry billions of dollars in compensation and lost revenues but it is proving a boon for one of the world’s most remote aircraft storage facilities. 

Asia Pacific Aircraft Storage, founded by a former distressed debt analyst at Deutsche Bank, has clinched a deal with Singapore’s SilkAir to store and maintain six of its 737 Max jets at its desert facility near Alice Springs in Australia’s “Red Centre”.

The aircraft, which were grounded in March after two deadly crashes in Ethiopia and Indonesia, are due to fly to the site in coming weeks when Australian regulators sign off on a flight plan, the Financial Times has learned. 

Australia’s Civil Aviation Safety Authority confirmed on Friday it had received an application from SilkAir to fly up to six 737 Max aircraft from Singapore to Alice Springs and it expected to finalise its assessment next week. 

250


The number of planes Asia Pacific Aircraft Storage could eventually accommodate

The aircraft were grounded due to potential problems with its new anti-stalling manoeuvring characteristics augmentation system, which have been linked to the cause of the crashes. 

“An important point is that this is a ferry flight only, with no passengers,” said a Casa spokesman. “It would be flown under special operating procedures with the MCAS system not operational.”

The grounding of the 737 Max has caused chaos for Boeing, which in July estimated that compensation for airlines for schedule disruptions and delays in aircraft deliveries would total $4.9bn. It is also causing difficulties for airlines, which have to store the almost 400 aircraft already delivered to them by Boeing. 

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Southwest Airlines has moved all 34 of its 737 Max aircraft to the ComAv aircraft storage facility about 90 miles north-east of Los Angeles in the Mojave desert. Last month United Airlines said it was moving its 14 Max planes to storage facilities at Phoenix Goodyear Airport in Arizona, owned by the city of Phoenix.

Both California and Arizona have dry weather conditions suitable for storing aircraft, but the options for storing aircraft in low humidity in the Asia-Pacific region are limited opening up an opportunity for Apas, which is based close to the outback town of Alice Springs. 

Tom Vincent, founder and managing director of Apas, said he could not confirm the SilkAir deal due to confidentiality but he said Apas was speaking to several airlines and leasing companies about storing 737 Max aircraft until they could return to service. 

Mr Vincent said the desert climate near Alice Springs was a big attraction for potential customers. 

“The high humidity found in many Asian climates can cause problems with corrosion,” he said. “We provide short-term and long-term aircraft storage programmes with engineers providing weekly maintenance,” he said. 

Apas said it can store a maximum of 30 aircraft but had plans to expand capacity to host 70 planes on its site. The company’s entire landholdings, when fully developed, could store at least 250 aircraft. 

Via Financial Times

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