Thursday, August 8, 2013

Boeing Likes Haggling A LOT

Boeing has a running dialogue with Poland's national carrier LOT Airlines for compensation for its four month grounding of the 787, during its earlier in the year 787 grounding. An action imposed on LOT at no fault to the operator.  It obviously cost them millions of US dollars for this disruption and the lost good faith, and other intrinsic values over the prior six months. LOT has a legitimated claim for compensation from the aircraft manufacturer. Boeing does not drive that compensation claim in a singular manner, by stating all customers claims have been resolved. It sounds like car insurance and a tree falling on your car.  You call your insurance agent explaining a tree crushed your car and they reply with a $500 dollar check and a Thank you very much, by saying all claims are settled.

Whoa, is the proper response from the claimant. "No one sat down with us and actually added up everything", is what LOT is saying. Lot's financial problem is not Boeing's financial problem, but a fair accounting of what Boeing's grounding imposed on Lot, is a Boeing's financial problem. That is what LOT is saying. However, Boeing does not acknowledge LOTS claim on Boeing and have legally brushed them off with a "everything is settled" argument.

But to be fair to Boeing they have indicated that in the next two weeks we will present a solution. Why would they announce that, if everything is settled with its customers? H'mmm, one would think two things are in play.
1. LOT never settled and...
2.Boeing paid out a standard "$500", to all customers without regard to the actual harm imposed on its airline customer.

An airline in financial straights would like to maximize the opportunity and enhance its claim as much as it can to bridge financial hole it finds itself in; partly due to the airline customers own business condition, and partly to the grounding.

Therefore, a legal process should be established that will sort out the mess. LOT requires compensation, sooner rather than later for its own financial predicament. Some of which is from 787 grounding, but not all. Boeing postures itself with a blanket settlement that suggest not everything is yet settled by LOT, who may have taken Boeing money as a down payment on its claim, pumping up its cash flow for operations during a period of financial failure. Hence we gain a statement from Boeing, "All customers have been compensated". Suggesting a truth, but not the whole truth. Its customers are still in the settlement phase, even though they may have received some Boeing compensation. Parsing through the words makes its difficult to unravel what is going on with Boeing and LOT at this time. In two weeks some additional details will spill out as both companies have indicated an important resolve is in the works.

The next stage of compensation will be announced at that time. Boeing will once again announce they have compensated everyone, but then a slight adjustment is being made to LOT as they have been made aware of LOT, during these valued customer discussions. LOT will respond, they are grateful for the opportunity for resolving Boeing related issues, even not all areas were addressed at this time. Like its own financial instability, it will move forward with excellent customer airline service. Boeing can't solve LOTS finances and LOT can't solve Boeing's negligence through  these compensation gestures.

Reference Article:

http://blogs.wsj.com/emergingeurope/2013/08/08/poland-asks-u-s-ambassador-for-help-to-refund-damages-from-boeing/