How will MAX recertification affect future airplanes?

Discussion
Getting bleaker

There’s just no getting around it: as more information comes to light from the investigations of the Ethiopian Airlines MAX crash and the Lion Air accident, things are getting bleaker for Boeing.

Reports last week that the pilots of ET302 followed the Boeing-recommended procedure for recovering from an MCAS incident, but still crashed, raise more questions about the lack of simulator training and procedures in the pilot manuals.

A 737 examiner for a major European airline, conducted a simulator test last week. The written report is here. The results show the difficulties faced by the pilots to recover from runaway stabilizer.

Boeing discovered integration issues between the upgrade and other installed software. This will delay getting the fix to the FAA for its review.

Longer grounding

As a result of this delay, Cown & Co’s aerospace analyst now estimates that the MAX could be grounded 9-10 weeks from its March 13 grounding by the FAA—or to about June 1.

“And because it’s unclear whether foreign regulators will evaluate the proposed fix in sync with the FAA or after the FAA review is complete, foreign airlines (85%+ of MAX backlog) likely will resume MAX operations even later,” Cowen wrote in a note last week.

Southwest Airlines removed its MAXes from the flight schedule through May. Air Canada previously said it took its MAXes out of the flight schedule through June.

An official at an airline due to receive its first MAXes in June now has doubts whether these will be delivered.

Impact on certifications?

With the certification of the MAX under review by the US Department of Transportation Inspector General, the FBI, the Justice Department, a grand jury and criticism from some overseas regulators who say they want to do their own analysis before allowing the MAX to return to the air in their jurisdictions, what will be the impact on the entire certification process in the US?

Boeing has the 7 MAX to certify this year. The first delivery is scheduled this year for Southwest Airlines.

The first 10 MAX fuselage was delivered to Renton last week for assembly for the first test airplane.

The first 777X, a -9, was scheduled to be rolled out of the factory three days after the Ethiopian crash. Boeing canceled the media and customer events (quite properly so). As of last Wednesday, the airplane sits on the sidelines at Boeing’s Paine Field facility ramp. There is no word when a first flight may happen. The first delivery is scheduled for late 2020.

“We’re focused on the MAX software update and there is no change to our airplane development programs,” a Boeing spokesman told LNA. “The first 777X flight test airplane rolled out of the factory in March of 2019.  Flight testing will begin in the coming months, to support an entry into service date of 2020.”

Two Wall Street aerospace analysts LNA queried believe certification could take 30%-50% longer once all the dust settles.

Whether this would be true for the 7 MAX and 10 MAX, which are straight-forward derivatives of the 8/9 MAX already in service and subject to the fixes that will be approved for the 8/9, may be in doubt.

But the 777-9, while a derivative of the 777 Classic under existing certification standards, will be the first “new” airplane facing approval following all the scrutiny of the MAX.

Will all the focus mean the FAA will want to certify the 777X as a truly new airplane, not a derivative? Or will it be certified as a derivative but face a longer process?

FAA-Boeing cooperation

The close cooperation between the FAA and Boeing also has come under intense scrutiny. While the crash investigations will determine whether some reforms are needed, realities suggest the basic foundation won’t see much change.

Absent a massive budget infusion into the FAA of $1.8bn and the hiring of 10,000 expert workers, there is little the FAA or the industry can do.

“Where are you going to conjure up all this expertise?” asked one industry insider, who works with Boeing but not for Boeing.

Production hit?

As the likelihood of an extended grounding increases, questions arise over how long Boeing can keep the current production rate of 52/mo in place.

Ramping down a rate would be a logistical challenge. How long would a ramp-down last? Then how long would it take to ramp back up?

Rate breaks typically get 12-18 months’ notice.

LNA doesn’t see a ramp down as a likely option.

But Cowen & Co. thinks it might put the ramp up to 57/mo, scheduled for June, at risk.

“We think this is likely to delay a proposed lift in the 737 rate to 57/month, which was slated to occur a bit after mid-year,” Cowen writes. “It’s unclear if Boeing will have to take additional actions to curtail output, but if it does, it’s unlikely to telegraph the change(s) before they are announced.”

 

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