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.
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.
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.
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.
May 2, 2019, © Leeham News, New York: Boeing faces huge claims from airlines with grounded 737 MAXes, the amount of which will depend on the time the airplanes are out of service, an aviation lawyer tells LNA.
The lawyer, who is not involved in any litigation from the Lion Air and Ethiopian Airlines MAX 8 crashes, has reviewed scores of Boeing purchase contracts in the ordinary course of his practice. It’s based on terms and conditions under the Service Life clause that he concludes Boeing could face about $1bn in claims for a grounding lasting five months—or until mid-August, as three key US airlines estimate before the MAX returns to service in the US.
The amount climbs the longer the groundings are in place but could be smaller if the global grounding is lifted sooner.
April 29, 2019, © Leeham News: Boeing got roundly thumped for blaming the pilots in the Lion Air flight 610 crash involving the 737 MAX last October.
It took months before Boeing CEO Dennis Muilenburg issued a video in which, among other things, he said, “We own it.” He was referring to safety of the MAX.
This was widely interpreted as Boeing stepping up and taking responsibility for at least some of the causes of the Lion Air and Ethiopian Airlines crashes.
Last Wednesday, he took it all back.
On the first quarter earnings call, Muilenburg denied there was any “technical slip or gap” in designing the now famous MCAS system. He said “actions not taken” contributed to the crash, a thinly veiled reference once again to pilot error. (More on this below.)
April 26, 2019, ©. Leeham News: In the wake of the 737 MAX crashes the standards to which Boeing and the FAA qualified and approved the 737 MAX MCAS function is questioned.
FAA has called the world’s aviation regulators to a meeting on the 23rd of May to discuss how the revised MCAS function will be approved. But it’s time to discuss more than how the updated MCAS shall pass.
April 15, 2019, © Leeham News: This column will no doubt light up the blog-o-sphere.
There’s been a major debate going on since the crash of Lion Air JT610, the Boeing 737-8 MAX that immediately became a huge controversy.
Boeing immediately blamed the pilots. So did some pilots of some US airlines, who said if the Lion Air crew had just flown the airplane, it wouldn’t have crashed. It was a training issue, some said.
Having got tremendous blow back over Lion Air, Boeing publicly held its tongue when Ethiopian Airlines flight ET302 crashed five months later.
Still, Boeing officials quietly still said there was nothing wrong with the airplane.
Some US and Canadian pilots maintained, publicly and privately, that a lack of training and pilot skills in the Third World was responsible.
They’re not entirely wrong.
April 10, 2019, © Leeham News: China will be the last country to review and approve fixes to the Boeing 737 MAX, according to the talk here on the sidelines of the Aviation Week MRO Americas conference in Atlanta.
Nobody knows, of course, when regulators will lift the MAX grounding orders. But none is looking for fast action.
And China, the first to ground the airplane, will be the last to lift the grounding, sideline talk here indicates.
April 9, 2019, © Leeham News: Delta Air Lines has the third largest third-party MRO company in North America and aggressively seeks to grow, in sharp contrast to its competitors.
While American and United airlines have limited their own maintenance, repair and overhaul, let alone seek third party business, Delta Tech Ops is a business unit and profit center. Delta CEO Ed Bastian said today that Tech Ops will achieve $1bn in revenues this year and has a goal of $2bn within five years.
Bastian was the lead-off speaker at the Aviation Week MRO Americas conference in Atlanta this week.
April 9, 2019 (c) Leeham News: Boeing stock price has been remarkably resilient since the Lion Air crash.
The 737-8 MAX was five months old and the type had been in service only since May 2017.
It took a big hit on Oct. 29, when Lion Air JT610 crashed, closing at $357 per share.
By early January, the stock price not only recovered its losses, it climbed back to $440 by Feb. 25, a record high.