Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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Paris Air Show Day 3: Eyes focus on Boeing for more MAX commitments
June 18, 2019, © Leeham News: As the Paris Air Show prepares for Day 3 (June 19, Paris time), eyes will be on Boeing to see whether another commitment for the 737 MAX will be forthcoming.
Headlines the first day were split between Boeing’s early morning briefing in which 
executives apologized for the fatalities on the Lion Air and Ethiopian crashes, sympathies to their families and disruptions to the airlines for the groundings and the Airbus launch of the A321XLR.
Tuesday’s headlines belonged to Airbus until 4:30pm when International Airlines Group, the parent of British Airways, Iberia, Aer Lingus, Vueling and LEVEL, announced a commitment for 200 MAX 8s and MAX 10s.
If any such order was to come at the air show, observers expected it to be from Ryanair, whose CEO Michael O’Leary already had publicly endorsed the MAX and said he could order more.
Returning MAX safely to service is Boeing’s “top priority”
June 17, 2019, © Leeham News: Boeing executives focused on its top priority, returning the grounded 737 MAX, safely to service, in its lead off briefing today at the Paris Air Show.
Greg Smith, EVP of The Boeing Co., appeared instead of CEO Dennis Muilenburg, taking the lead in recapping much of what has been known for weeks: Boeing’s regret for the 346 fatalities in the Lion Air and Ethiopian accidents, the MCAS software upgrade and working with airlines and regulators to determine the path back to recertifying the MCAS and the best curriculum for pilot training.
Boeing Commercial Airplanes CEO Kevin McAllister, Defense unit CEO Leanne Caret and Global Services unit CEO Stan Deal followed Smith in a tightly scripted set of presentations and answers to questions.
The four immediately left the stage after the Q&A instead of loitering for the usual press gaggles.
Pontifications: The elephant in the room
By Scott Hamilton
June 17, 2019, © Leeham News: The Paris Air Show opens today and the elephant in the room is the Boeing 737 MAX.
There is no telling when the airplane will get FAA approval to return to service. According to some news reports, Boeing will hasn’t turned over the MCAS revisions to the FAA for review, testing and approval.
The acting administrator of the FAA said he expects the MAX to be back in the air by the end of the year. Some leapt to the conclusion this means December—and it may, but let’s remember September, October and November are before the “end of the year,” too.
There’s no telling how other global regulators will act, and when, to conduct their own review and approvals. Airlines would like a global action. It’s tough to tell customers one country sees the airplane as safe but others don’t.
- Leeham News will be at the Paris Air Show this week, with coverage by Scott Hamilton, Bjorn Fehrm and Judson Rollins. All coverage will be open to all readers.
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.
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?
Pontifications: Mandate sim time for MAX return to the skies
May 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.
- Our paywall will be posted later than usual. Airbus Innovation Days begin today and we’ll be reporting from Toulouse.
- Ethiopian MAX crash simulations stun pilots: Aviation Week.
- MAX simulators didn’t replicate MCAS conditions: New York Times.
- Boeing corrects flawed simulator software: Reuters
- 737NG, MAX simulators were supposed to be the same: Leeham News.
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
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.
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.
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?
Boeing customer compensation for MAX already at $1bn and climbing, estimates aviation lawyer
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.