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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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.

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MAX impact on Boeing NMA beginning to emerge

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Introduction

May 2, 2019, © Leeham News: There was indication last week Boeing’s decision on whether to approve the New Midmarket Airplane program will slide.

CEO Dennis Muilenburg said on the company’s first quarter earnings call the focus is returning the grounded 737 MAX to service.

A decision on authorizing the sales force to offer the NMA for sale is ambiguous. For the first time, targeting 2025 for entry into service appears to be acknowledged as iffy.

The statements confirm LNA’s analysis and our reports that the 2025 EIS is unlike.

Summary
  • Advanced manufacturing is key to NMA production, but all elements need to fall into place—a “production moonshot.”
  • For more than a year, LNA and others predicted the NMA EIS in 2025 is not possible.
  • Engines won’t be ready by 2025 EIS. See here and here from March 2018.
  • Latest woes from CFM on the LEAP add to uncertainty; CFM is the favorite for NMA. See here.
  • Engine selection by Boeing put off until after MAX problems solved, grounding lifted.
  • Authority to Offer for sale at Paris Air Show unlikely and 2025 EIS now in doubt.

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Pontifications: “We own it, but…”

By Scott Hamilton

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.)

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Bjorn’s Corner: Time to reassess the safety standards for our airliners

By Bjorn Fehrm

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.

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Training is a factor in the MAX crashes

 

By Scott Hamilton

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.

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From the sidelines at the MRO Americas conference

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.

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Delta Tech Ops 5-year goal to double revenues

#MROAM

Ed Bastian, Delta Air Lines CEO.

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.

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Boeing stock price resilient since Lion Air accident

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.

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Pontifications: Remembering two other mysterious 737 accidents

By Scott Hamilton

April 8, 2019, © Leeham News: Boeing’s corporate response to the crash of Lion Air JT610 was initially to blame the pilots of the former and defend the airplanes in that accident and the Ethiopian Airlines ET302 crash.

Neither is surprising in this world of instant lawsuits.

These actions are also in Boeing’s corporate culture.

But in a major shift in corporate tone, Boeing CEO Dennis Muilenburg last Thursday issued a video in which he said Boeing “owns” the MAX accidents. This is very un-Boeing. (It will be interesting, however, to see how Boeing’s legal team responds to the lawsuits.)

I’m reminded of the last time the 737 was involved in two mysterious crashes in which Boeing blamed the pilots in one of them. The causes of the two accidents turned out to be placed squarely on the airplane, however.

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