HOTR: American’s threat to Boeing: no MAXes without financing

By the Leeham News staff

July 14, 2020, © Leeham News: Last week’s news that American Airlines told Boeing it won’t take delivery of 17 new 737 MAX-8s unless it can get financing isn’t a surprise for those in the know.

This could be a bit of negotiating in the press.

When MAX was grounded, AA had lined up Japanese financing for its next round of deliveries. The lease rate was said to be in the vicinity of 0.52%, a number that is unconfirmed. But it was a very inexpensive lease rate. Over the course of the balance of 2019, the financing expired.

American’s strategy

When COVID shut down the industry in March 2020, AA held a conference call with lessors/financiers and declared it would take delivery of all its MAXes. People on the call wondered what AA finance people were smoking. AA officials went on to explain that with over-financing (ie financing at more than AA paid for the airplanes), they’d not only get their progress payments covered, they’d obtain more cash for the over-financing (none of this is new, BTW), so they’d be cash positive. The theory was that American would add millions of dollars to its bank account.

American would also get “maintenance holidays” of a new airplane under warranty and the ability to permanently retire older 737-800s that were coming up for heavy checks and the need for interior refreshes.

Now, with COVID, and AA’s latest corporate financing at 11.5% and values of the MAX declining by 11%, you can see the problem in obtaining low lease rates.

$40bn in debt

Also, American now has borrowed billions of dollars, loading up the balance sheet to $40bn in debt. Lessors may be reluctant to add to their American exposure. Or, with credit default swap rates indicating market skepticism over American’s ability to avoid a Chapter 11 bankruptcy at some point, lessors may also be leery of taking on more risk with the airline.

An American officer last month told Holly Hegeman of Plane Business: “There are ways with Boeing and Airbus in which you can re-structure the fleet plan. And for the first time ever we have some leverage with these guys. We never had that in the dark days of AMR.”

This may be a case that American can get better pricing from Boeing than it can in the market. Also remember, 22 of the 787-8s it ordered were going to Boeing Capital for lease back, not to AA ownership. And that was in 2018 when things were still good and COVID-19 didn’t exist.

Lease rates, values update

Here’s last week’s aircraft value and lease rates update from the appraisal/consulting firm, Ishka:

Looming price war?

Market intelligence indicates Boeing’s sales force has been authorized to have unusual pricing flexibility to do deals, especially for the 737 MAX.

Months ago, Airbus was concerned that it might face a price war as Boeing tried to reinvigorate sales of the MAX. Now, with COVID, this may be coming true.

Stay tuned.

70 Comments on “HOTR: American’s threat to Boeing: no MAXes without financing

  1. Overfinancing…first I heard of this technique to get more money in the bank than you pay Boeing at delivery before it’s onsold for leaseback.
    Buying new planes increases cash flow…no wonder certain airlines have mega orders of 737, especially an Irish one, by negotiating big discounts….it’s a Ponzi scheme

    • The Irish airline in question makes a huge profit…don’t forget that.
      It also has the largest narrowbody fleet in the world, after Southwest.
      And it’s the fifth largest airline in the world in terms of passengers carried.
      So it has plenty of clout as regards negotiating discounts.

      However, it too is suffering badly as a result of the CoViD crisis, and it didn’t get any government aid to help its cashflow. Moreover, it’s probably going to get additional headwinds from Brexit. Accordingly, it’s pre-CoViD growth plans are now probably very unrealistic. In terms of actually taking any of the ordered MAXs, I’ll believe it when I see it…regardless of the discount offered.

    • It is pretty common but related to the lease rate, lease period and conditions of aircraft return. Historically private leasing companies make much more money then goverment owned airlines.
      New managers at airlines likes the sell/leaseback to get a pile of cash to repaint the fleet and buy new uniforms to pilots and air hostesses/pursers but those taking over the fleet responsability at half time until accepted redelivery with all documentation approved and eventual residual payment for spare engines/stands/APU’s and landing gears normally looks much more tired…

  2. It does remind me of the Car Hire/Rental business in Europe. The companies buy high volumes and get huge discounts. The customers pay more as they are almost guaranteed a new car. After a few thousand miles/Km’s the car is sold on for more than the purchase price.

    No real maintenance costs either.

    I wonder how that is working at the moment.

    • A new aircraft has a warranty of around 5 years (I gather there is some variance in each contract but its around that).

      If you get a great discount and a warranty, that is a sweet deal.

      Other aircraft have do go through they the various maint checks so you then look at how it all falls out in the costs involved.

      At one time Ryan Air was selling the 737s as they came out of warranty.

      Ryan Air just waits until Boeing is in trouble and then strikes for a good deal (good for them). Having watched Boeing you know they will be in trouble sooner rather than latter (and best of all is a dual crisis like we have)

      Boeing, the gift that keeps on giving.

      • > Ryan Air just waits until Boeing is in trouble and then strikes for a good deal (good for them).

        The other way to look at this is:
        >Ryan Air just waits until Boeing is in trouble and then helps them out with orders they desperately need.

          • Agree, nothing altruistic on either side.

            Funny to see one predator corner another one

  3. So, as we have to start sentences these days, the trick is to borrow money against the perceived prospective ‘true’ second-hand value of the aircraft and then negotiate a acquisition deal with Boeing at a lower relative price – that’s not entirely novel, is it? Might that incidentally help any LCC that has agreements to pay no more than any other customer can negotiate for new Max aircraft, or perhaps there’s a limit to AA pulling power (whether or not through megaphone diplomacy)?
    I am unclear about the terms that secured AA participation in the original Max launch and seem to remember they announced simultaneous ‘orders’ for 100 Max (and 100 other 737NGs) alongside a deal for up to 625 A320neos – all assisted (then) by more than $10 billion OEM finance.

    • Correcting my previous: of course, initially it wasn’t an order but a simple statement of AA’s selection of 200 737s (plus options on a further 100) and agreement for both parties to work out the details of a re-engined variant as they went along.

  4. That’s a massive 30% drop in the market value for a 773. It’s now worth no more than a 788. This really demonstrates the collapse in WB traffic demand — and the length of time that airlines expect that situation to continue.

  5. Boeing negotiation power (say no to an airline proposal) can’t be compared to the same situation 2 years ago. We better erase our old references as starting points for today’s negotiations.

    Airlines are trying to find ways to escape their commitments instead of trying to get early slots. The MAX is the second best NB and it’s now grounded for 16 months (!!) because of deep quality problems. Boeing is hardly inhe driverseat anymore, the market turned 180 degrees.

  6. I would dare to speculate, that before 2020 turns the corner, all mayor Airlines will be, again knocking on the Fed’ Door to pitch-in
    for Bailout/Loan Funds running in the $100 Billions. Time will tell!

  7. “”American Airlines told Boeing it won’t take delivery of 17 new 737 MAX-8s unless it can get financing””

    No problem if AA won’t take delivery. In these hard times this should be expected.
    I would tell AA financing is at around 20%.

    “”22 of the 787-8s it ordered were going to Boeing Capital for lease back””

    Were the buy back price and lease back rate already negotiated when AA ordered the 787-8?

    • Boeing is in no position to tell anyone financing is at .05% let alone 20%

      What if we pay you to take them off our hands?

      Or more accurately, 0% financing for the next 5 years and 3% after that.

      Pretty please!

      • MAX production starts slow. Not good if those 17 MAX were already produced but delivery of them is slow too.
        These conditions AA is proposing are just not possible. Do you think Airbus would accept them?
        These times are even harder for Boeing and Airbus.

        The lease back rate must be negotiated already which might be high, much higher than the current market rate.

      • Don’t forget the proposal for the US Fed to lend directly to distressed large corporates at close to 0%. That may give Boing some flexibility here.

        • Then AA should get financing from the US Fed too. But they might not get every amount and as I understand AA got already $40b.

          I read AA spend much money to refresh their cabins, new seating and new overhead bins. They do this now because planes are parked.

          If I could get 0% financing I would buy planes, park them till the economy recovers and then sell them.

      • Thanks Scott,
        so I would think the estimated value when signing the contract was much higher than the current value. So AA would also have to pay much more for leasing than they would have to with current values.

  8. Off topic, but just saw this on Flight Global in a story about trainers:
    > The Chicago-based airframer…[aka Boeing]

    Anyone else do a mental double take every time they read that? Not sure I will ever internalize that.

    • Boeing is actually still incorporated in the state of Delaware, from 1934. They retain the articles of incorporation there. Business records address is in Chicago.

      Pretty common now for large companies to be distributed, as a result of mergers and acquisitions.

      • a very large fraction of american corporations are Delaware corps (of those that haven’t reverse mergered with an offshore tax haven company that is). Delaware has very business friendly laws which make it worthwhile to be a “Delaware corp” even if you have no other connection to Delaware.

      • Rob, bilbo, et al – was Bill Boeing right to leave the company in 1934 when it was broken up by the trust-busting Air Mail Act (which, as I understand it, prevented monopolies from both manufacturing airframes/engines and carrying passengers/cargo) to establish the separated Boeing, United Air Lines, and United Technologies [aka Raytheon Tech…] entities?

        • I think Bill Boeing was disgusted with the government and withdrew from any activities dealing with them, going into semi-retirement and mainly dealing with technical matters afterwards. Other victims left the country entirely.

          He’d been demonized as a monopolist without any other evidence than his participation in building several companies, and consolidating with others to form an efficient working group. He had adhered to all the rules governing mail contract awards, and had broken no laws.

          The plaintiffs in the airmail fraud cases had underbid the existing carriers by 25%, but were found to not have the wherewithal to carry out the contracts. They viewed this as bias and fraud. So the issue was basically diligence vs lowest bid.

          When the airmail contracts were overturned and delivery given to the Army, the disaster was so complete and total that it had to be reversed within a few months. It was a major embarrassment for the Roosevelt administration, so they could not just restore the earlier contracts, they had to create the appearance of wrong-doing to justify their earlier actions. The way to do that was to break up the existing companies and form new ones.

          As is often the case, the government’s motivation was good, they wanted to bolster the emerging aviation industry so that mail delivery would become cheaper and subsidized by passenger travel, rather than the reverse. They wanted consolidation & regulation of air routes, and to have a fewer number of stronger carriers.

          Ironically, the market was already achieving these things, but the government tore that down to do it in a manner they felt was better. In so doing they created a much larger scandal (including pilot deaths, along with loss of mail & service) than the award of contracts. The legacy has been the belief that exists to this day, that business can function better than government to provide services.

          • “He’d been demonized as a monopolist without any other evidence than his participation in building several companies, and consolidating with others to form an efficient working group. ”
            Buying up most of the small airlines for their air mail contracts in order to build competitive advantage is the definition of ‘monopolising’. Why sugar coat this ?
            And the breaking of the laws came from the collusion of the contractors to divide up the routes, aided by the political Postmaster general.

            It may seem quaint now , but the airmail service then was as important as the internet is.

          • Duke, I’m sorry but this is not accurate. Boeing buying companies and consolidating them was/is not against the law. It was consistent with government policy at the time.

            No proof was ever offered as to the charges that were made of bias or fraud, apart from the unselected lower bids, which were judged on grounds of ability. There was no formal trial or hearing to establish guilt.

            The perception of injustice was based on the “Spoils Conference”, which was conducted by the government under 1930 legislation, to divide up the routes and contracts. Awards were made to the strongest companies, which were judged best able to provide continuous service under all conditions (poor weather and night flying, considered quite hazardous at the time). Those companies had pioneered the use of radio and electronic navigation aids, with their aircraft being equipped with expensive early technology.

            Based on the advice of his cabinet, Roosevelt used his presidential authority to terminate the airmail contracts and transfer control of airmail to the Army. Later, Roosevelt roundly castigated his cabinet for advising him poorly. He was extremely angry as he had been made to look like a fool, and he was right. Those people knew nothing about the airmail business or the needed technology.

            Note also that when the companies were disbanded, the replacement companies also consolidated routes, and merged many of the smaller companies that had complained about the bids. Consolidation had been the stated goal of the government before the scandal, as well as after.

            Also the contracted rates after the scandal, were essentially the same as before, thus disproving the original allegations. They didn’t drop until passenger travel began to subsidize the mail. Although the focus on passenger revenue was required by the 1934 legislation, there had been no objection to it before, by the former owners.

            The owners obviously were bitter about this. They had provided an excellent service and had essentially built the airmail system from scratch, including many innovations in technology. But their contribution was dismissed as a political expediency.

            They were not hurt financially, as they were able to disband and sell their companies to new owners, or reorganize and keep some subsidiaries. But it was a blow to reputation and sense of accomplishment. I can relate to how they felt about it.

          • I too can relate to big buck operations and what they do.

            Its not in a good way though.

            Squish them like a bug comes to mind.

      • Well, true but that is a common place, it is the head office they are referring to and that’s in Chicago. But even given another 20 years it will still seem strange to think of Boeing as anything other than a Seattle company.

        Be interesting to know which is the tail and which it the dog.

        • Perhaps FlightGlobal et al should best say ‘Chicago-headquartered…’ Re dog and tail, surely a major consideration behind the move was to try to seperate Group HQ from BCA proximity/influence? In fact, I’ve long argued that the move was an element in the whole 787 saga, in that BCA was no longer ‘Number 1 son’ in the family and might have lost confidence if it was suddenly on equal footing with other divisions – that, and other considerations such as loss of a half-generation of engineers/technicians since previous model launch, decision to adopt new materials technology, share design and financial risk with overseas partners, and aggressive program schedule…

  9. If a new MAX is worth 60M, then a .5% monthly lease rate would 300,000 per month, or 3.6M per year. Is this in the neighborhood of what of what they were to lease these 17 new aircraft for?

  10. Forget about the 0.52%, that’s not possible, especially not before covid.
    On May 18 the lease rate for a 5 years old 737-800 was 0.89% and that was with covid.
    The cheapest lease rate on May 18 was for a 350-900 with 0.61% and that is a widebody nobody wants during covid. The 787-8 was for 0,68%.
    These lease rates also depend on how many planes the leasing companies have in stock. Before covid it wasn’t easy to get planes.
    It was said AA had Japanese financing, that must not be a lease. Maybe AA had only financing for only 50% of the sale price, then a financing rate could be 1.04% for the whole plane.
    For 0.52% EVERYBODY would have signed a leasing contract and then leased it to someone else for 1,04%.

  11. The U.S, Department of Justice has, sadly, missed an opportunity to fully cripple AB! I think they should have NOT left the table with under a $10 Billion fine. AB’s corruption level is so vast, it might have taken over 10 years to prosecute all the cases! Looking forward to quite a perp walk, also looking like it will involve the current ceo on some helicopter deals! It takes forever to get going on getting “scalps nailed to the wall”, but that’s apparently in the works currently. Getting out the popcorn; this should be “fun”.

    • Airbus has reached Deferred Prosecution Agreements (DPA’s) in all of their criminal cases. So unless they recidivate, there will be no further prosecution or fines. If they do, their prosecution will resume and result in conviction, as they have already admitted guilt.

      The US jurisdiction was limited to cases affecting US businesses through FCPA corruption, and ITAR arms reporting violations. So the US component was only a small part of the overall prosecution, and the US fines reflected that.

      The primary jurisdictions were in France and the UK, where the fines were very much larger.

    • MontanaOsprey – ’tis scarecely DoJ’s job to ‘cripple’ Airbus to any degree, me thinks…

      • Now, prosecute Boeing Exec on MAX charges, yes.

        Cripple though? Hmmm.

        Lot of peoples jobs depend on those ops that have nothign to do with the criminals at the top.

        • Too bad. Let’s NOT have you introducing a “Boeing distraction” to my comment; this comment’s laser-focused on the totally complicit and corrupt AB. It’s taken FOREVER to get to this point. (Finally, supposedly, AB individuals are to prosecuted.) If it were up to me, DOJ would say “UK and French” you’re way too “cozy” (corrupt also?) on this with the DPAs. “We’re taking over the reins. Here are the Interpol warrants. Deliver these guys to JFK within five days-or else. Or else what? We’re naming your units as corrupt enterprises under our RICO statutes!” It’s time for the U.S. to “get the knives out”. We’ve got some Old-fashioned, scalp-hunting to do in this case!

      • I would think it’s equally DOJ’s job to persecute, oops, prosecute, AB. I wanted to see at least a $1 Billion fine, and ALL their former execs/perps frogmarched to the pokey-in UK, France, or preferably the US!

        • @MontanaOsprey

          All of your posts on everything related to the Airbus Company and to key Airbus personnel, typically come off sounding like a deranged, discombobulated and confused person who’s hating Airbus with a vengeance.

          BTW, with the way things are going in the United States, the 27 remaining EU member countries will soon likely refuse to extradite any EU citizens to the United States. The risks of torture or other inhuman or degrading treatment in the United States should be considered pursuant to the EU Charter of Fundamental Rights, taking account of the relevant ECJ and ECHR case law.

          US-style perp walks undermines the presumption of innocence. In fact, perp walks demonstrate a blatant unfairness and prejudice that’s caused to somebody accused of a crime when you put their picture in paper with handcuffs on. They aren’t allowed to be in front of a jury with handcuffs on. Why should they be allowed to be in front of a perspective jury with handcuffs on?

          In contrast, European law — like European culture more generally — is very sensitive when it comes to questions of the protection of personal dignity. And personal dignity is understood, in particular, as control over one’s public image. US-style perp walks are, therefore, really thoroughly condemned by European Civil Law very broadly.

          Whatever one might think of the allegations directed against an individual, the fact that a suspect, not a convicted person but a suspect shown in handcuffs, is looked upon by most Continental Europeans as an absolute outrage. It’s a terribly undignified way to show somebody. Also, there are many more protections for dignity in Europe. It’s not just a matter of keeping cameras out of the courtroom, the dignity of prisoners is protected in prisons even after they’ve been convicted. There are no barred doors, there are no humiliating uniforms, people are even required to be addressed as monsieur, mister, Herr (etc) and so and so and madam, Frau (etc) so and so when they’re in prison.

          In contrast to the primitive retributivism in the United States, there’s a great commitment in Continental Europe to guaranteeing the dignity of everybody.

          Finally, I’d suggest you watch this video:

  12. From American Airlines too:

    FlightGlobal 11 July 2020

    American pilots review Boeing’s latest Max training draft

    ““American Airlines’ pilot union is now reviewing Boeing’s latest 737 Max pilot training draft. The Allied Pilots Association (APA) received the draft in the last two weeks.
    Boeing modified the system to prevent MCAS from firing if the jet’s two AOA sensors disagree by 5.5° or more. Boeing also says its changes prevent MCAS from providing multiple inputs or commanding more stabiliser input than the flight crew can counter by pulling back on the control column.
    Boeing, in designing the Max, had assumed pilots would respond to an MCAS activation the same way they would respond to runaway trim, by following the runaway trim checklist.
    The updated checklist says both pilots – the captain and first officer – might need to turn the wheel at the same time. Or, one pilot might need to use both hands to turn the wheel – like pedaling a bike with your hands.
    One of APA’s concerns is that Boeing’s draft training does not address another method of getting the manual wheel to turn – the “unloading the elevator” tactic. That involves easing back on the control column, which can sufficiently alleviate forces so that the manual wheel can be turned.““

    I wonder how a pilot can pedaling the trim wheel like a bike. I want to see this. Pedaling a bike is completely different.
    Now both pilots need to turn the trim wheel at the same time. This means one pilot is not allowed to visit the lavatory during flight. But if both pilots are needed to turn the trim wheel in bend down position … Who is flying the plane???
    Regulation 25.143
    ““The airplane must be safely controllable and maneuverable without exceptional piloting skill or strength. For conventional wheel type controls, the maximum control forces permitted are 10 pounds for long term application.““
    Obviously the MAX doesn‘t meet this regulation. JT043 flights will be the new standard.
    I think we all know that the FAA will certify this. Can’t be serious.

    • Leon, the actions described would be for extreme situations with high aerodynamic forces. It would be good for pilots to also practice the unloading maneuvers as well, as a secondary method for those situations.

      In normal conditions, the pilots can still operate the trim wheels with one hand. I think pilots will understand that, the difference, and why extreme measures would be required in extreme situations.

      • Rob:

        Thank you for the morning laugh.

        Are extreme condition not what we have pilots for?

        Routine any lump of transistors can fly and airplane. USN has done auto land on a Carrier with drones.

        Me thinks there is some serious cherry picking of reality going on here.

        Nothing to see here folks, just keep on moving (Pearl Harbor Dec 7, 1941 and 9/11 come to mind)

    • Doesnt that maximum force rule only apply during normal flying not short term ‘edge of envelope’ situations. But its a good point about the strength required , which may be above some of the female pilots capability

      • JT043 was not short term edge. They were only able to control the flight with trim wheels for hours. The big difference JT043 had 3 pilots, FAA is certifying for 2 pilots.

        On each side is a trim wheel with one pedal. If one pilot wants to pedaling like a bike, he needs to grap around into the others pilot’s leg room. Pedaling is only possible if both pedals are 180 degrees apart. I want to see this. Is his head touching panel switches then?

        10 pounds in this bend down position is not possible. They would be doing this because other systems already failed. Might have unreliable speed on the clock, so it could be dangerous to reduce speed and therefore the forces on the trim wheels might be too high, same as ET302.

        If using the trim wheels is the only way to control the flight it needs to be designed different and needs to be power assisted. Why not have real pedals like on a bike and pedaling with legs. But still then, on a bike you pedal only in one direction, you don’t pedal back, you also don’t have the same power to pedal back.

        The trim wheels were never designed for this. They were designed for fine tuning with ease during normal flight. That’s why there is the fine scale for adjustments. Now it will be certified as the only way to control the flight in a runaway trim situation.

        United and Southwest pilots didn’t comment. Their unions should ask for a third pilot. The good thing during covid times the MAX is not really needed and can be parked. Unions have enough time to think about this and ask for other means.

        • Leon, pilots have been handling trim wheel forces in the range of 10 to 20 pounds for 50 years. There are videos on-line of pilots using them. In normal conditions they can be spun without the handle.

          Above 20 lbs becomes an issue as it requires two hands or two people. Hence the revised training.

          • Rob:

            That is known as a cop out.

            Or, Prayer.

            You clearly have not a clue. You also miss the trim motor clutch breakout (look it up)

          • The wheels got even smaller on the MAX and there is less space to use both hands. The pilot is in an awkward position, he might be able to push and pull but not up and down on the handle. He needs to turn it many times for a fraction of a degree. This is long term application and only 10 pounds maximum are allowed.

            The wheels can’t be grandfathered and then made smaller.
            It can’t be that elevators and stabs made stronger because of higher forces on the MAX and everything else connected kept weak or were made even weaker.
            Can’t be they invent a “novel” solution to move the stabs, hide infos and self-certify it.
            Invent a deathtrap and don’t allow EASA to test it.

            Maybe the flight attendants know exactly what’s going on and won’t risk their lives for the little money they earn.
            Were the flight tests really flown by Boeing pilots and the FAA was only monitoring?

    • The quoted CFR 25.143 is for control column forces. Compliance must be demonstrated with the aircraft in trim. Forces are acknowledged to be higher when the aircraft is out-of-trim.

      I couldn’t find a separate CFR for trim wheel forces. If CFR 25.143 applies, then the measured trim wheel force of 21 lbs at Vmo, as established by the ET302 interim report, should be compliant with the short-term rating for one-handed operation.

      The regulation CFR 25.255 covers the out-of-trim situation. The sum of required control force, on standard column pitch control plus auxiliary manual pitch control, must not exceed 125 pounds to achieve a 1.5 g recovery, at the maximum test dive speed Vdf.

      If we subtract the maximum column pitch force of 75 lbs, that would leave a maximum of 50 lbs on the trim wheel. The force measured in the ET302 interim report was above 40 lbs, so that is consistent. Also given the MAX control layout, this recovery would require both pilots with both hands, one on the column and one on the trim wheel.

      The ET302 report also said that at 40 lbs, the wheel was movable with two hands, although “not convenient at all”, which we can interpret as still difficult. That’s likely why the two-handed or two-person training will be emphasized.

      It’s interesting that CFR 25.255 assumes a 3-second movement of trim before it would be arrested. That is similar to Boeing’s 4-second assumption. That may need to be reviewed in light of recent findings. Clearly in the MCAS accidents, the accumulated trim movement was closer to 20 or 30 seconds.

  13. “”Also given the MAX control layout, this recovery would require both pilots with both hands, one on the column and one on the trim wheel.””

    One pilot needs to fly the plane alone. The other pilot is there for monitoring. The forces can’t be devided to 2 pilots.
    If you want to devide forces to 2 pilots you need a third pilot for reading the damn checklists. JT043 only survived because of a third pilot who had the overview, the other 2 pilots were busy.

    • Sometime cooperating instead of fighting authorities, resisting and diverting works much better and faster. This might be a culture, leadership thing.

    • The PF is permitted to ask for assistance from the PM, so that is not an issue. The recovery quoted above assumes the aircraft is diving at maximum speed, as a worst-case scenario. The PM is not going to be unwilling to help.

      These procedures assume that the pilots will remediate the abnormal conditions that create the extreme trim wheel forces, which should make this a temporary situation. In normal circumstances, the PF can operate the trim wheels with one hand.

      • @Rob

        It’s possible to recover MAX from “abnormal” trim conditions by trimming it manually only if aircraft has enough altitude & ground isn’t elevating, or there are no mountains around – so pilots have plenty time & altitude.

        But you have to pray to have both, otherwise you are in a coffin. Praying is a poor way to safety in aviation.

        This MAX flaw isn’t addressed.

        If any MAX automation regarding trim position will go haywire it’s very possible that you are dead.

        • Pablo:

          Well put, a lot of praying on the Titanic and unless you got into a lifeboat it did you no good.

          I do think it should be clear the Trim Wheel issue(s) are not MAX direct, though it is part of it as a result of a hand off.

          Also to be clear is another severe issue in regards to Trim Motor seize up and clutch break out forces.

          Per Duke/Rob side: I guess you have to be an industrial farm implement background to understand that. Having dealt with clutch breakout forces for many years I do.

          You don’t get a feel for machinery from the intellectual Ivory Tower.

          • TW, the clutch breakout issue is known to have occurred once, possibly twice. Neither resulted in an accident, as the stabilizer was in a normal position when it jammed.

            We don’t know what those breakout forces are. If it’s possible to practice the jammed stabilizer in the simulator, I’d be all for it.

            Here, though, we’re taking about a runaway stabilizer, so it’s not jammed. The two issues are separate. I’ve not seen the potential of a jam being raised as a certification issue by any of the involved parties.

          • Rob:

            We are not talking about a runaway stabilizer (more Boeing spin) , we are talking about software that was driving the nose down with total authority that was hidden from the FAA and the Airlines.

            In the other cases, the stab did not jam, the trim motor did (and there were two on the classic by the way) . Alaska airlines Flight 261 had a jammed stabilizer (more accurately a jammed worm gear).

            So your view of a safety system is as long as it works when its not needed its a perfect system, truly stunning.

            No different than jumping the high temp safety on a boiler.

        • Pablo, I think this depends on speed of pilot response, which will be another focus of the training. Forces depend on altitude and airspeed, so we will assume worst case of Vmo at low altitude below.

          We know that the MAX stabilizer motor runs at about a quarter degree of motion per second. So within 4 seconds, you have 1 degree of rotation which is going to be significant. Column forces of 30 lbs and trim wheel forces of 30 lbs.

          Within 10 seconds, you have the full 2.5 degree authority of MCAS which we know is going to add 50 lbs to the column and 50 lbs to the trim wheels.

          Within 20 seconds, you have 5 degrees of deflection and the stabilizer has hit the stops. 90 lbs on the column and the trim wheels may be at 90 lbs as well, but are effectively locked.

          So the situation becomes progressively worse with time. The pilots should respond as soon as they sense a trim change. First counteract with electric trim, if that doesn’t work then switch off the trim motor immediately.

          Also this has to be a memory item, obviously. Normally the aircraft is not operating near Vmo, so there is less force involved, so more time involved, and things are not as critical.

          However if the worst case does arise, and the trim runs for more than 10 seconds unopposed, then the unloading maneuver may be required, which does use up altitude, as you say.

          I think 5 to 10 seconds is a reasonable response time for a memory item that involves pressing a button at your fingertips, and then moving on to the center console switch if needed. But it has to be trained and ingrained.

          The single most important factor, is not to focus on the column as the solution, but rather on the trim controls. The column cannot overpower the stabilizer in a full runaway event. This is counterintuitive so it must be practiced. It was the main pilot factor in the accidents.

          • Firstly, these were not accidents. Said accidents are incredibly rare and are used to white wash a situation.

            Deliberate Safety Violations is a lot closer.

            No, the main pilot factor in the killings was MCAS that was contradictory to the so called memory items. MCAS did not act the same way as runaway trim which was Boeing’s memory checklist.

            20 seconds is far more realistic for a real memory item and verging in f not impossible for a Deliberate Safety Violation.

            Every one of Boeing actions were deliberate and they clearly covered up what they had done when the system was presented to the FAA.

            Just as clearly and directly reported are the fact that Boeing used test pilots reactions for the basis of their claims when in fact test pilots know what test is coming and are not line pilots who spend huge amounts of time in routine flight.

            Human factors data tells you that you can’t expect anyone to shift from day in day out monotonous routine to an emergency in 10 seconds. Sullenberger would be an exception.

            Clearly the crashes themselves make that clear. Avoided by one with a 3rd pilot to assist (they guy should get a medal)

            The Ethiopian crash occurred despite a heads up (and not training) on the MCAS 1.0 lethal software.

            You design a system for the lowest allowed operator not the best.

            Boeing clearly knows what the capability of the worst operators

            767 dive into Galveston Bay and AF447 come to mind (the first clearly has no business in a cockpit regardless and the second is a slam dunk perfect example of well trained crews that can’t shift)

          • TW, we’ve covered this all before so I won’t rehash it here. You’re like Ahab chasing the white whale. Persecute at any cost.

            The best protection the pilots could have, is an understanding that the elevators lack the surface area to compete with the stabilizer, if the aircraft is significantly out of trim. Therefore they cannot hope to fight the aircraft with the control column alone. The stabilizer/trim problem must be addressed instead.

            That should be at the core of their training, and is what the captain of JT610 did. MCAS went through 20-plus cycles because he interrupted and reset the stabilizer each time. He kept the column forces neutral, as he was generally trained to do, even though he had no specific knowledge of MCAS.

            The other three pilots involved in the accidents fought the column instead, and were overwhelmed. Two of them did this even with knowledge of MCAS. Further, other pilots also did this in the simulator pilot testing, being slow to correct the stabilizer. This despite it being a required memory item.

            We can understand this as a general conceptual & perceptual problem, and address it with training, without the need to either absolve Boeing or blame the pilots. It’s clear they gave their best effort, whereas Boeing did not with MCAS. But it helps no one to pretend this didn’t happen. That won’t make flying safer.

          • “”The best protection the pilots could have, is an understanding that the elevators lack the surface area to compete with the stabilizer””

            Elevators need to be bigger. Stabilizers need to be designed as a redundant moving stabilizer. Philip mentioned it long time ago.
            Controlling the flight with trim wheels (insert clown face here)

            The best protection would be a red push button which activates a tape recording and loudspeakers in the cabin: “We have a deathtrap, if you want to survive hurry up and move to the back of the plane, everybody move to the back now.”

          • Ironically Boeing is the both Ahab and the great white whale here. The dead Pax were the Pequod.

            We can agree Boeing did their best to pretend this never happened, until China shut them down.

            You can contrast that with Airbus who paid for the discovery of AF447 top confirm (despite extremely high data value already ) of what happened.

            You continue to try to deflect to pilots, clearly you don’t have any idea what it takes to pilot an aircraft let alone one that is doing ops that is outside their training.

            You also fail to address the fake Sim ops with the trim wheel that Boeing inserted (those do not occur in a vacuum, that data for a Sim characteristic ) and then also blame the pilots.

            Having put an aircraft into a condition I had no training for, despite having many years then and post of excellent responses to emergencies, I can confirm the total confusion that occurs when a system is not doing what you were trained it would do.

            The actuality is that this would never have happened if Boeing had not setup a lethal MCAS 1.0. Pilot issues are not new. Just ask the pax on AF447 (also a memory issue amongst other aspects)

            Pilots can’t do their own training. When your simulator has false ops and that is what you trained on, you are danged right that pilots will not react correctly.

            You speak of pilot reaction time through true ignorance at best.

            In fact it took over 3 minutes for the saved Indonesia flight to do the right action and that was with the third pilot not two.

            Boeing is fully aware of what training standards there are for the Co Pilot in Indonesia and Ethiopia (as well as the rest of the world)

          • Simulator did not have false ops. It wasn’t programmed for trim forces at speeds exceeding the speed limit at altitude.

            Pilots are now receiving training they needed in the beginning. They are also being consulted on what that training should be, a huge improvement. They are wisely asking for additional training on trim control & the trim wheels. No one, ever, here or anywhere else, has suggested that pilots do their own training.

            MCAS was runaway trim with a 5 second intermission in the middle. The JT610 captain handled it correctly, as is clearly shown in the accident data. He responded within seconds and it took a few cycles for him to learn the pattern and oppose it.

            Pilot confusion in unexpected circumstances is why we train, so as to minimize the impact. It’s also why military pilots do better in those situations, their training focuses more on the unexpected. JT610 captain was confused about the source of the problem, which he could not have known, but not about how to handle it.

            The JT043 captain also responded within seconds to MCAS, and trimmed against for each activation, again as clearly shown in the accident report data. Except for one brief excursion to about 2 units, which also happened at first to the JT610 captain (and was immediately corrected in both instances), he kept the stabilizer between 4 and 5 units, which was a neutral value he retained for the rest of the flight.

            It’s absolutely true that the accidents wouldn’t have happened without the MCAS flaws. That’s why Boeing has paid out about $300M in damages thus far. Again, no one here, ever, has claimed otherwise. You’re really chasing the white whale there.

            But MCAS was also clearly not the only contributing factor. And those same other factors were also demonstrated in random testing, with other pilots. So not exclusive to the accidents.

            And so we must address training as well. Pilots know this and have accepted it, wanting more. Airlines know this and have accepted it. FAA/EASA know this and have accepted it. Boeing knows this and has accepted it.

            But some here do not accept it, will never accept it. So we just have to leave it at that.

  14. This is a good example of good facts and bad facts

    Clearly Norwegian has a legitimate legal issue on the MAX.

    To mix that up with the 787 and RR issue with the Trent 1000/TEN. Pheweee.

    Boeing offered two engine and Norwegian chose the RR. That is on them.

    When 60% of the airlines were choosing GE they saw something just in the basic Trent 1000 ops that did not sit well (lower SFC and higher costs).

    That also has morphed into a total mess on the 1000 and TEN.

    • Norwegian? You mean the “airline” that should have been “dead and buried” six months ago? (Even before C Virus ran rampant?) ROFL

      • I guess every airline was waiting for EASA.
        But since it seems that that was useless they went to court.
        I think more will follow.
        Bad PR for Boeing.
        Lost another good customer.

        • The fact remains, realistically, they should have at least chaptered themselves last winter. But I guess there’s little or no Chapter 11 type reorgs in Europe (excepting Alitalia?), hence my “dead and buried” comment re: Norwegian.

        • Norwegian airlines has withheld some $400M in refunds to passengers for flights cancelled due to COVID. There is now a class-action lawsuit against them to recover those funds.

          Also Norway has mandated the empty middle seat rule (with exceptions for family members), which has forced Norwegian to operate at a loss on most flights. They were already a volume-based low-cost carrier, so they’ve been hit especially hard.

          So I think they are facing a perfect storm. They are entitled to compensation from Rolls Royce for the Trent and from Boeing for the MAX, but it’s not going to be enough for them to survive.

          Getting Boeing to take back aircraft would give them some breathing room, but I don’t know if they have adequate legal grounds, if COVID is considered a force majeure.

          • Norway is rich, they can bail them out.
            In 2019 they cancelled Airbus orders, but why did they prefer 787 and MAX, it’s a crap airline to me, a greedy cattle carrier.

            Lufthansa didn’t pay back tickets too.
            Lufthansa is now partly owned by Merkel, it seems not important to her to pay back tickets, only peanuts.
            Lufthansa didn’t pay much tax in Germany, they pay tax in Malta.
            So why did the German taxpayer bail out Lufthansa with billions when Lufthansa doesn’t pay tax, not peanuts.

            Empty middle seats do nothing when people are not careful and airlines don’t enforce it. The aviation industry is hit hard, everybody is trying to survive. And USA in free fall, 200000 new covid cases in the last 48h. Everybody needs to be careful till there is better medication. Last I read most covid people get brain damage. Long ago I loved The Omega Man movie, never thought that this could really happen.

          • “” I don’t know if they have adequate legal grounds, if COVID is considered a force majeure.””

            MAX has nothing to do with covid.
            EASA wasn’t allowed to flight test and you think there are no legal grounds LOL
            There are reasons for this and you know it. Do you want to talk about it again.

            787 has the same basic problem, Boeing’s arrogant self-certification business, producing 787 without lightning protection and after 100 planes are in service telling little FAA cops about it.
            And there are many more examples.
            I guess Norwegian found thousand empty beer cans in the fuselage when there is an AD about foreign objects and evidence that the stubborn child didn’t follow it.

            So Norwegian did what Muilenburg told them, “Sue us”.
            Even US pilots sued Boeing. Do you think they will fly the MAX if the elevators are not working? For every flight they should get a big bonus, flight attendants too, to participate on the MBP (Muilenburg Bonus Program).
            Designed by clowns, oversighted by monkeys and the cops only have part time jobs to clean the circus. But the monkeys offer full time clown jobs and everybody is happy.
            The rest of the world don’t need this. The MAX will crash again.

          • Leon, I meant only that the COVID crisis has forced Norwegian’s hand. They let those orders stand for about a year, knowing they’d get compensation for their additional costs, from both Rolls Royce and Boeing.

            Without COVID, and with normal income, that would have carried them through the MAX and Trent crises. Now that will not be enough to save them, they need a much greater reduction in cost to match their reduction in income. Hence the desire to return the aircraft, and hence the questionable legal grounds.

          • Lufthanasa and taxes ?
            “In total, the airline has 92 subsidiaries in corporate tax havens (using the Tax Justice Network’s Corporate Tax Haven Index as benchmark). In Malta, a subsidiary with only two employees made a profit of almost €200 million. Nine other Maltese companies are run by six employees and manage assets worth more than €8 billion.”

            Norwegian (Long haul airline) is registered in Irelandas are its planes, so technically is Irish company rather than Norwegian. In practice its run by Norwegian Air Shuttle, the carrier based in Norway who also operate the short haul network.

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