Comair now has a clear path ahead to proceed with its fraud case against Boeing, relating to the B737 MAX.
A US District Judge has ruled that South Africa’s much-loved but now defunct airline Comair may proceed with its fraud claims against Boeing.
The case relates to Comair’s 2013 agreement to acquire eight Boeing 737 MAX 8s.
In February this year, Comair sued Boeing over the purchase agreement, claiming damages of at least US$83 million (R1,6 billion). Comair accuses Boeing of fraud in omitting and misrepresenting material facts about the newer model's similarities to the older B737 versions. It also accuses the manufacturer of failing to state the need for substantial pilot training and the existence of the Maneuvering Characteristics Augmentation System (the now well-known term, MCAS) on the MAX.
Boeing met the case with a motion to dismiss, arguing that the “representations” it had made before the agreement were "too general" for it to be accused of concealing information.
According to a report in News24, the court ruled in favour of the airline but dismissed one of its claims. But the result means the action against the manufacturer still stands.
"Comair has plausibly alleged many false representations based on presently existing facts as to the development of the 737 MAX, even though the delivery would occur years later," said the District Judge.
Dr Eric Levenstein, a Director of Werksmans Attorneys, the firm instructing the lawyers arguing against Boeing, highlighted the significance of the latest court order.
Speaking to News24, he said: "This is the first time that fraud claims against Boeing dating back to 2013 have survived, as such fraud claims by other airlines against Boeing have been dismissed."
He said the manufacturer was now legally obliged to formally respond to Comair's case.
Comair's final liquidation hearing has been delayed, awaiting the results of this case. The next hearing has been set for January 2024, with a possible extension, according to lawyers.
Comair received the first 737 MAX (ZS-ZCA) in February 2019, four months after the October 2018 crash of Lion Air – this was just a month before the Ethiopian Airlines crash in March 2019. That aircraft plied the JNB-CPT route for less than a month when the aircraft type was grounded.
The second MAX (ZS-ZCB) was built in March 2019 and was due for delivery to Comair a month later. The third aircraft was scheduled to arrive in SA for Comair’s use in 2020, the fourth in 2021, the fifth and sixth in 2022, the seventh in 2023, and the last in 2024. These acquisitions are reported to have been cancelled by Comair, and the airline rejected Boeing's attempts to deliver the fourth MAX in 2021 after the type regained certification.
