Flights are cancelled, airlines are in a logistics nightmare and passengers are wondering how high airfares may now spike as Boeing announced it would ground its worldwide fleet of MAX 8 jets.

The planes started to be wheeled out of service at airports around the United States within hours of the Federal Aviation Administration issuing an emergency order to ground 737 MAX 8 and MAX 9 aircraft until further notice, in light of Sunday's deadly Ethiopian Airlines crash.

The last MAX 8 aircraft in US skies was believed to be Southwest flight WN2569 from Oakland to Newark airport, which reached its destination about 10am Sydney time.

After resisting a decision for days, Boeing has now confirmed it would ground all 371 of its MAX aircraft worldwide "out of an abundance of caution and in order to reassure the flying public of the aircraft's safety".


The decision may cost the US jet-maker up to US$7 billion ($10.2b), according to analysts.

Civil aviation authorities, including in Australia, had already banned the aircraft from their own airspace as investigators worked to determine the cause of Sunday's crash that killed 157 people.

Black box recorders from the crashed plane are on their way to Paris to be analysed.

In the US, airlines have been frantically working to re-accommodate customers booked onto flights serviced by MAX aircraft.

Southwest Airlines, Boeing's biggest customer for the MAX, has had to ground 34 of the planes, which serviced about 150 flights every day. Its passengers are being offered flexible policies to re-book travel.

Southwest flight 2569 prepares for landing at Newark airport. Photo / Supplied
Southwest flight 2569 prepares for landing at Newark airport. Photo / Supplied

American Airlines has put its 24 MAX planes out of action, while United Airlines said about 40 daily flights would be affected.

The three airlines said they remained confident in the safety of the MAX but would comply with the FAA's order.

Former FAA official Stephen Lloyd said while airlines had some reserve aircraft, it was not enough to make up for the dozens of planes now out of service.


But, he added, MAX aircraft were only a small part of the airlines' fleet.

"It's certainly going to be felt, but it's really only a small handful of planes that we're talking about here," Lloyd told Florida's Local 10 News.

Airlines may face a plane shortage, said Ahmed Abdelghany, a professor of operations management at Embry-Riddle Aeronautical University in Florida.

"For every 50, 60 aircraft, you might have one that's coming out of maintenance," he told Time. "Most airlines don't have spare aircraft."

Boeing could lose up to US$7b by grounding all MAX planes, according to Wall Street firms Melius Research and Jefferies.

That sum was based on a three-month grounding of the jets, CNN reported.

And much of that may be compensating airlines for loss of revenue due to temporarily mothballing their MAX planes and compensation paid to delayed passengers.

Norway's largest airline, low-cost carrier Norwegian Air Shuttle, has already said it would demand a payout from Boeing after it was forced to ground 18 MAX 8 aircraft and cancel 19 flights on Wednesday.

"We're going to send the invoice to those who built the plane," a spokesman for the company, Lasse Sandaker-Nielsen, told AFP.

He said the airline "should not suffer financially from this".

In India, where MAX jets have been grounded by already cash-strapped airlines, airfares for domestic travel may rise by 20 per cent, Bloomberg reported.

But passengers outside of India's struggling airline industry may be spared.

Airlines would be reviewing their MAX warranties as they brace for "significant impact" from this grounding, Mark Dombroff from US corporate law firm LeClairRyan said.

"The insurers, Boeing, everyone, is reading insurance policies, warranties," he said, according to Yahoo.

"Everyone is reading everything now because all of a sudden an entire fleet worldwide has been grounded. All airlines operating this aeroplane are, or were, impacted to a greater or lesser degree, either cancelling flights or covering flights.

"These airlines are high-usage pieces of equipment. They're flying them seven days a week."

Dombroff said airlines were unlikely to take Boeing to court, given their business with the company, but they would be reviewing "tightly drawn" warranties and making insurance claims.

"They could have potentially significant damages," he said of the airlines.

The FAA said the decision to ground the MAX — a recent, more energy-efficient version of Boeing's popular 737 — followed the discovery of new, unspecified evidence at the Ethiopia crash site that linked it to a similar fatal crash in Indonesia in October.

It also came amid new reports of pilots' concerns with error messages in the cockpit of MAX 8 planes.

It's not the first time Boeing has grounded an entire global fleet. In 2013, it told airlines to stop flying its 787 Dreamliner because batteries in the plane were catching fire.

The worldwide grounding of the MAX jets has limited impact to passengers flying in Australia. Only two airlines flew the plane into the country: Singapore Airlines' Silk Air and Fiji Airways.

No Australian airline flies MAX aircraft. Virgin Australia, which has 30 Boeing MAX 8 aircraft on order with the first to be delivered in November, said it would not fly any new MAX aircraft until it was "completely satisfied" with its safety.