Pontifications: Compensation claims against Boeing beginning to ramp up

By Scott Hamilton

May 27, 2019, © Leeham News: Airlines are increasingly going public with desires to be compensated by Boeing for the grounding of the 737 MAX.

Norwegian Air Shuttle and Spice Jet said shortly after the MAX grounding March 13 they were going to seek compensation from Boeing.

Air China has asked for compensation, reports Reuters. Other airlines with grounded MAXes are also beginning to notify Boeing about compensation claims.


  • Today’s paywall will be delayed to take advantage of the Embraer pre-Paris Air Show briefings that begins today. I’ll be reporting from Brazil.

Compensation for delivery delays is also a risk to Boeing. This already has reached $1bn, one aviation lawyer estimates, and stands to climb by billions more, depending on how long new deliveries are delayed.

But Boeing is preparing to take a preemptive defensive move against these latter claims.

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NMA is a briar patch, top Airbus salesman says

#AirbusID

May 21, 2019, © Leeham News, Toulouse: The chief commercial officer for Airbus half hopes Boeing will step into a briar patch and launch its long-discussed New Midmarket Airplane, but the real message is clear: leave well enough alone.

Left unsaid it Airbus doesn’t want to have to launch a new airplane of its own.

Christian Scherer, the chief commercial officer for Airbus, said he wouldn’t speak for Boeing when asked if Boeing “has” to launch the NMA because of the declining market share of the 737 MAX vs the A321neo and inferior range and field performance of the -9/10 MAXes. He questioned Boeing’s own position about the NMA.

He made these remarks on the sidelines of the annual Airbus Innovation Days pre-air show briefings.

“I’m not sure they have a unified position on it. What I want to say is that we are in a very competitive duopoly, which is great for our customers,” he said. “There’s competition everywhere. You don’t have to dominate one segment or the other segment. There’s quite healthy business in it for Boeing on the 737. There’s quite healthy business in it on bigger airplanes. I’m not sure they have to do anything. Do they want to do something? Yeah, maybe.”

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This is not simple

By John Cox

John Cox

May 20, 2019, © Leeham News: The latest version of the Boeing 737 is the MAX. It has new engines, new flight deck screens and the latest in-flight entertainment systems for passengers. It is quite a change from the 737-100 that first entered service 51 years earlier in 1968.

After flying operationally for 15 months (May 2017 to October 2018), there was a loss of a 737 MAX 8 in Indonesia. Five months later, another MAX 8 crashed. Something was wrong. How could such a proven workhorse have two accidents in such a short time in very similar circumstances?

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Pontifications: Mandate sim time for MAX return to the skies

By Scott HamiltonMay 20, 2019, © Leeham News: “Safety is our top priority.”

So says Dennis Muilenburg, CEO of The Boeing Co.

As stories drip, drip, drip out in The Seattle Times, New York Times, Washington Post, The Wall Street Journal and other media about Boeing’s development process of the 737 MAX, one can’t help but wonder otherwise.

Pilots weren’t told of MCAS. Switch functions were changed. Warning lights were inoperative, but the pilot manuals indicated otherwise. Boeing discovered one problem but didn’t tell the FAA for a year. A single point of failure. The absence of information about the MCAS in the pilot manual. A second software glitch is found in the flight control system. Boeing said it didn’t want to “inundate” pilots with information. Blaming the pilots for the accidents.



But nothing is Boeing’s fault. There was no failure, no gap, no technical problem. Or so says Muilenburg.

Yet within one week of the Lion Air accident, in which Boeing pointed the finger at the pilots, Boeing was diving into the MCAS design.

It goes on and on.

If “safety is our top priority,” it’s time for Boeing to man up and do the right thing, regardless of the legal liabilities.

It’s time to back simulator training on MCAS before pilots can fly the MAX. Read more

Bjorn’s Corner: Why I wouldn’t hesitate to fly on the MAX after the fix

By Bjorn Fehrm

May 18, 2019, ©. Leeham News: We are now two months into the grounding of the Boeing 737 MAX because of MCAS. Boeing announced yesterday it has finished the work on the fix and it’s now ready for FAA certification flights. Once FAA has certified the fix, the 737 MAX will return to the sky. At least this is how it used to be.

A lot of hesitation and distrust has come into the system since the March 13th grounding. Here’s why I wouldn’t hesitate to fly on the MAX after the fix.

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How Boeing named, promoted the MAX in early days

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Introduction

May 16, 2019, © Leeham News: As a Congressional investigation into the Federal Aviation Administration’s oversight and certification of the Boeing 737 MAX development ramps up, LNA dipped into its archives to review what the company was telling the public.

The MAX was hastily launched in July 2011, when American Airlines informed Boeing it was about to place a record-setting order for nearly 500 airplanes. Airbus was lined up to snare it all with the A320ceo and neo families unless Boeing could make a credible offer.

Within 48 hours, Jim McNerney, then-CEO of Boeing, made the decision to launch the re-engined design of the 737. This later was branded the MAX.

It was a plane Boeing designed but didn’t want to build.

Once launched, Boeing had to play catch up to Airbus, which had a seven month lead with its neo. The public messaging was long on bashing the A320. There were few technical details presented in public, but the basis for what’s become in focus today after two fatal crashes was there.

Summary
  • Boeing promoted commonality between NG and MAX.
  • Making a virtue of basic design.
  • Integrating the larger engines.
  • Promoting the same simulators.

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Boeing to support MAX simulator demo (Update)

  • Boeing CFO meetings show confidence in recertifying MAX sooner than later.
  • Returning to pre-grounding production rates will be “gradual.”
  • FAA clearance anticipated in 4-5 weeks.
  • Boeing will urge pilots, regulators to witness simulations of MCAS flight characteristics.
  • NMA, 777X delays likely.

UPDATE: Cowen & Co issued a revised note today, with new language concerning simulations of the MCAS flying characteristics. Boeing is not urging sim training. Rather, it is urging regulators and pilots to go to sites where MAX MCAS flying characteristics may be witnessed and understood.  Cowen tells LNA it misunderstood what Boeing said.

May 10, 2019, © Leeham News: In a sign that Boeing is confident it’s on track with the fix of the MCAS for its 737 MAX, the chief financial officer of the company Wednesday and Thursday made the rounds in New York and Boston with aerospace analysts and key institutional investors.

Greg Smith

Coming out of these meetings is news that Boeing will support simulator training for pilots to fully understand MAX handling characteristics, one analyst reports.

Greg Smith gave the financial analysts Boeing’s latest thinking about progress in returning the MAX to the skies across the globe. He also said Boeing is using the production slowdown (from 52/mo to 42/mo) to allow suppliers, notably engine maker CFM, to catch up from their own delays and strains. The suppliers maintained the 52/mo rate.

Spirit Aerosystems said it hopes that CFM, which has been running two-three weeks late with engines–will return to rate 52 in June. This is faster than suppliers were told by Boeing when the rate was cut in April. At that time, June’s rate ramp up was goal was 47/mo, with 52 in August and 57/mo in September. Boeing last year planned rate 57 in June this year.

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FAA prepared to act alone to lift MAX grounding

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Introduction

May 9, 2019, © Leeham News: Boeing hopes that the Federal Aviation Administration will lift its grounding order for the 737 MAX as early as next month. It is prepared to act alone, LNA has confirmed, rather than waiting for a consensus from global regulations.

Some airlines and aerospace financial analysts, as well as others like LNA, consultants and observers, wonder if global regulators will agree with the FAA or move more slowly.

The FAA already initially concluded simulator training won’t be necessary for pilots to understand the now-infamous MCAS system and its upgrades. After one round of comments for the proposal, which is common in the FAA process, the agency is accepting a second round of comments.

Transport Canada, however, already indicated it wants simulator training before lifting the grounding order affecting nearly four dozen MAXes at Canada’s two largest airlines, Air Canada and Westjet.

Other agencies haven’t publicly weighed in.

There were some reports the FAA may wait for all regulators to agree before lifting the grounding order.

But LNA confirmed the FAA will act on its own review, while fully briefing global regulators, who will make their own decisions.

Summary
  • “Regulatory power grab” in focus, writes aerospace analyst.
  • Some hope for early lifting of grounding order, others don’t see return to service until September.
  • Is the Joint Authorities Technical Review panel the precursor to a new global regulator for certification?

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Pontifications: Rebuilding the MAX and Boeing brands

By Scott Hamilton

May 6, 2019, © Leeham News: Boeing has a big job ahead of it to restore faith in the 737 MAX with flight crews and the flying public.

Recertification is still weeks or perhaps months away. The return to service may be anywhere from July to August or even longer, depending on how global regulators proceed with review and approval of the revised MCAS software and pilot training.

Pilots at airlines seem split whether a “simple” computer training protocol is sufficient or whether a flight simulator training is required.

Let’s set all this aside on the safe assumption this will work itself out, whether sooner or later.

So, the question then becomes: how does Boeing repair the MAX brand—and its own.

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Ascend takes a close look at MAX values, future

April 30, 2019: Aviation consultancy Ascend took a close look at the Boeing 737 MAX in a 30 minute Youtube video.

The consultancy begins and ends the video talking about other airplanes, but the middle focuses on the MAX, lease rates, values and considerations about the grounding.

The video is below.

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