Not long after the head of the FDA took a test flight on the newly revamped Boeing 737 MAX 8, Europe's top travel regulator has surpised the aviation world by becoming the first major regulatory body to sign off on the 737 MAX 8 returning to the skies, roughly 18 months after the plane was grounded internationally after a second suspicious crash.
Even though an upgrade demanded by the agency won't be ready for up to two years, EASA - the European Aviation Safety Agency - has signed off on allowing the MAX to return to commercial flight before the end of the year. According to Patrick Ky, the executive director of the agency, the regulator is performing final document reviews ahead of a draft airworthiness directive that's expected to be issued next month. The directive will be followed by a 4-week public comment period. Boeing has said that plans to add an additional "synthetic" sensor to add redundancy will take 20 to 24 months. Though, to be sure, that "software-based" solution will be added to the larger Max 10 variant before it's 2022 debut.
"Our analysis is showing that this is safe, and the level of safety reached is high enough for us," Ky said in an interview. "What we discussed with Boeing is the fact that with the third sensor, we could reach even higher safety levels."
Though a sign off from the FAA would be the ultimate boon, after Boeing again booked zero new orders for the MAX in September, the European market is still one of Boeing's biggest.
Congress also found that the FAA outsourced so much of the approval process to Boeing itself, a dangerous example of regulatory capture that led to hundreds of deaths.
After shedding half of their value since the start of the year, Boeing shares were up more than 2% on the news during premarket trading. Given all the embarrassing details showing how deeply Boeing corrupted the FAA approval process, the public might not have been so trusting if the FAA had taken the lead. The fact that EASA is the first to step up and give Boeing the green light - despite the WTO dispute between European champion Airbus and its American rival - might make a difference when it comes to the all-important metric of consumer trust.
Boeing's decades-long ties to Washington state could soon be numbered.
In a massive blow to Seattle, labor unions and the liberal run state of Washington, Boeing is moving its 787 Dreamliner production to South Carolina in an effort to cut costs, Bloomberg revealed on Thursday.
It is a move that is raising questions about how long Boeing may remain at its massive plant in Everett, where it has produced planes since the 1960s.
Dreamliner production is being consolidated as demand for Boeing's planes has dropped amidst the 737 MAX controversy and the ongoing pandemic which has decimated the travel industry. The easiest way for Boeing to cut costs is to move to non-union labor in South Carolina and trim its operations.
It's also the latest move in Boeing bolstering operations in Republican-governed South Carolina. Aerospace analyst Richard Aboulafi noted that 747 production would end by 2022 and that “the overhead costs will be increasingly borne by the surviving planes, the 767 and 777X, which don’t have a lot of pricing power right now.”
Washington Governor Jay Inslee stopped figuring out new ways to raise taxes and defund the police long enough to issue a statement critical of Boeing, stating that the state would need to take a "hard look" at Boeing's tax treatment. He estimated 1,000 jobs could be at risk.
Meanwhile, Boeing has been in the midst of scrambling to shore up its financials after two fatal 737 MAX crashes and the subsequent grounding of its 737 MAX planes in the interim. Melius Research estimates Boeing could see $23.3 billion in cash burn this year as a result of those groundings, coupled with the Covid-19 pandemic.
Boeing CFO Greg Smith said in July: “The goal is to improve cash-flow profile, restore our balance-sheet strength as quickly as possible. And these actions will help get us there.”
Governor Inslee said: "We have asked the Boeing Company multiple times what it needs to keep 787 production in Washington". Inslee also claimed the move would "signal an allegiance to short-term profits and Wall Street...”
On Monday, Airbus revealed three visual concepts for "zero-emission" commercial airliners powered by hydrogen, which could enter service by 2035.
The planemaker's push for the world's first zero-emission commercial aircraft is part of a much larger ambition for emission-reducing airliners as non-governmental organizations, such as the OECD, are urging industries and countries to begin the transformation to a green economyto power the recovery following the virus-pandemic downturn.
Three carbon-free commercial aircraft were unveiled, including a turbofan design, turboprop design, and "blended-wing body" design. Airbus said it's "leading the way in the decarbonization of the entire aviation industry."
"This is a historic moment for the commercial aviation sector as a whole, and we intend to play a leading role in the most important transition this industry has ever seen. The concepts we unveil today offer the world a glimpse of our ambition to drive a bold vision for the future of zero-emission flight," said Guillaume Faury, Airbus CEO. "I strongly believe that the use of hydrogen - both in synthetic fuels and as a primary power source for commercial aircraft - has the potential to significantly reduce aviation's climate impact."
A turbofan design (120-200 passengers) with a range of 2,000+ nautical miles, capable of operating transcontinentally and powered by a modified gas-turbine engine running on hydrogen, rather than jet fuel combustion. The liquid hydrogen will be stored and distributed via tanks located behind the rear pressure bulkhead.
A turboprop design (up to 100 passengers) using a turboprop engine instead of a turbofan and also powered by hydrogen combustion in modified gas-turbine engines, which would be capable of traveling more than 1,000 nautical miles, making it a perfect option for short-haul trips.
"Blended-Wing Body" Design
A "blended-wing body" design (up to 200 passengers) concept in which the wings merge with the main body of the aircraft with a range similar to that of the turbofan concept. The exceptionally wide fuselage opens up multiple options for hydrogen storage and distribution, and for cabin layout.
"These concepts will help us explore and mature the design and layout of the world's first climate-neutral, zero-emission commercial aircraft, which we aim to put into service by 2035.
"The transition to hydrogen, as the primary power source for these concept planes, will require decisive action from the entire aviation ecosystem. Together with the support from government and industrial partners, we can rise to this challenge to scale-up renewable energy and hydrogen for the sustainable future of the aviation industry."
While it's no secret the airline industry is attempting to find a way to remedy its carbon footprint, challenges still persist for storing volatile liquid hydrogen during flight. Airbus has dismissed concerns that hydrogen is a risky substance and has called for new investments in energy infrastructure.
Global aviation accounted for about 2.4% of all emissions in 2018.
Paul Stein, chief technology officer for engine maker Rolls-Royce, told the AFP in early 2020 that the industry is "under significant pressure to improve its sustainability image."
Airlines are "working with us to find pathways to increase the availability of sustainable fuels, look at how electrification can impact them... and also looking to more and more efficient engines and airframes," Stein said.
Boeing Put Profits Before People's Lives By Hiding 737 MAX Design Flaws From Regulators, Pilots
18 months after Ethiopian Airlines Flight 302 plummeted out of the sky just minutes after takeoff last March, Congressional investigators have finally released a comprehensive report outlining the many mistakes made both by Boeing and the FAA during the certification process.
In the months that have passed, investigators have kept the pressure on Boeing (and its share price) with a steady stream of leaks. We've already seen emails showing Boeing engineers criticizing the 737 MAX 8 design time in some of the harshest terms imaginable (at one point, one irate engineer complained that "the plane was designed by clowns, who were supervised by monkeys".
Production pressures that jeopardized the safety of the flying public. There was tremendous financial pressure on Boeing and the 737 MAX program to compete with Airbus’ new A320neo aircraft. Among other things, this pressure resulted in extensive efforts to cut costs, maintain the 737 MAX program schedule, and avoid slowing the 737 MAX production line.
Faulty Design and Performance Assumptions. Boeing made fundamentally faulty assumptions about critical technologies on the 737 MAX, most notably with MCAS, the software designed to automatically push the airplane’s nose down in certain conditions. Boeing also expected that pilots, who were largely unaware that MCAS existed, would be able to mitigate any potential malfunction.
Culture of Concealment. Boeing withheld crucial information from the FAA, its customers, and 737 MAX pilots, including internal test data that revealed it took a Boeing test pilot more than 10 seconds to diagnose and respond to uncommanded MCAS activation in a flight simulator, a condition the pilot described as “catastrophic.” Federal guidelines assume pilots will respond to this condition within four seconds.
Conflicted Representation. The FAA’s current oversight structure with respect to Boeing creates inherent conflicts of interest that have jeopardized the safety of the flying public. The report documents multiple instances in which Boeing employees who have been authorized to perform work on behalf of the FAA failed to alert the FAA to potential safety and/or certification issues.
Boeing’s Influence Over the FAA’s Oversight Structure. Multiple career FAA officials have documented examples where FAA management overruled a determination of the FAA’s own technical experts at the behest of Boeing. These examples are consistent with results of a recent draft FAA employee “safety culture” survey that showed many FAA employees believed its senior leaders are more concerned with helping industry achieve its goals and are not held accountable for safety-related decisions.
All these flaws eventually led to the "preventable deaths" of 346 passengers. Boeing repeatedly dismissed warnings and complaints from employees related to MCAS, which was created to compensate for a redesign of the plane's interior to create more space for passengers. One of the flaws was that MCAS relied on a single sensor, which was prone to feeding faulty information.
Why did Boeing need MCAS? Because, as the NYT explains, the engines on the Max are larger and placed higher than on its predecessor, so they could cause the jet’s nose to push upward in some circumstances. MCAS was designed to push the nose back down. In both crashes, the software was activated by faulty sensors, effectively forcing the plane's nose down repeatedly, eventually forcing them into a fatal nosedive.
What's more, Boeing successfully lobbied the FAA to avoid classifying the new software as "safety critical", meaning that the company didn't need to update pilots on how it worked. Some pilots reportedly weren't even aware the software existed before the crashes. Boeing deliberately concealed test data showing that if a pilot took longer than 10 seconds to realize that MCAS had kicked in accidentally, the results would be "catastrophic". Boeing knew all that before the twin crashes that shut down the program...and the company still did nothing. The company also deliberately concealed faulty alerts that would have warned pilots about problems with the sensor used to trigger MCAS.
In a statement, DeFazio blamed Boeing for kowtowing to Wall Street pressure, and putting profits before people's lives.
"Our report lays out disturbing revelations about how Boeing—under pressure to compete with Airbus and deliver profits for Wall Street—escaped scrutiny from the FAA, withheld critical information from pilots, and ultimately put planes into service that killed 346 innocent people. What’s particularly infuriating is how Boeing and FAA both gambled with public safety in the critical time period between the two crashes,” Chair DeFazio said. “On behalf of the families of the victims of both crashes, as well as anyone who steps on a plane expecting to arrive at their destination safely, we are making this report public to put a spotlight not only on the broken safety culture at Boeing but also the gaps in the regulatory system at the FAA that allowed this fatally-flawed plane into service. Critically, our report gives Congress a roadmap on the steps we must take to reinforce aviation safety and regulatory transparency, increase Federal oversight, and improve corporate accountability to help ensure the story of the Boeing 737 MAX is never, ever repeated.”
Rep Rick Larson added that the report, combined with separate findings from regulators in Indonesia and Ethiopia, would help paint a more complete picture of what led to the crash.
One of the most egregious decisions made by Boeing was opposing a requirement that pilots receive simulator training to fly the plane. If pilots needed to be retrained, Boeing would have had to eat some of the cost out of its end of the deal, according to an NYT report. This focus on cost-cutting "drove a lot of really bad decisions," DeFazio said.
The Democrats on the committee also accused Boeing of putting a priority on profits by strongly opposing a requirement that pilots receive simulator training to fly the plane. Under a 2011 contract with Southwest Airlines, for example, Boeing promised to discount each of the 200 planes in the airline’s order by $1 million if the F.A.A. ended up requiring simulator training for pilots moving from an earlier version of the aircraft, the 737NG, to the Max.
“That drove a whole lot of really bad decisions internally in Boeing, and the F.A.A. did not pick up on these things,” Mr. DeFazio said.
The report alleges that the 'time pressure' imposed on the 737 MAX project was unusually intense. Keith Leverkuhn, former Boeing VP and General Manager of the MAX program, allegedly kept "a countdown clock" in a conference room, which he allegedly described as an "excitement generator".
"One of the mantras that we had was the value of a day,” he said, “and making sure that we were being prudent with our time, that we were being thorough, but yet, that there was a schedule that needed to be met…" one Boeing worker said.
Back in 2012, in order to lower development costs, Boeing reduced the work hours involved in the MAX's avionics regression testing by 2,000 hours. It also examined other reductions to save costs, including a reduction to flight test support by 3,000 hours.
Boeing doesn't shoulder the blame alone. According to the report, the FAA "failed to ensure the safety of the traveling public" as "excessive" outsourcing had "impaired [the FAA] from acting independently."
The report comes as regulators are reportedly close to finally lifting the grounding order by approving the newly redesigned MAX; the expectation is that the plane might be back in service before the end of the year.
In addition to the report, Congress has introduced legislation that would toughen the agency's certification process, in part by requiring that it carry out regular independent audits on company-employed representatives.
Responding to the allegations in the report, the FAA said it "is committed to continually advancing aviation safety and looks forward to working with the committee to implement improvements identified in its report.” Boeing, meanwhile, said it had learned lesson. "Boeing cooperated fully and extensively with the committee’s inquiry since it began in early 2019. We have been hard at work strengthening our safety culture and rebuilding trust with our customers, regulators and the flying public.”
But like we've learned from Sweden's approach to the pandemic: Just because people have the option of doing something, doesn't mean they will. The 737 MAX 8 has such negative associations, that President Trump suggested Boeing rename the plane, and the company has been quietly working on a rebranding effort.
After failing to ring up even a single order for the MAX in 2020, Boeing finally celebrated a small order from Enter Air, a Polish charter airline, a few weeks ago. However, recent reports about alleged design flaws with the aerospace giant's 787Dreamliner, and other Boeing planes, could create lingering problems for shares even after the 737 MAX is back in the skies.
An internal FAA memo, viewed by WSJ, reveals another crisis that could be developing at Boeing, and no, it does not involve the 737 Max that remains grounded. New details are emerging, the company's 787 Dreamliner could have components within its fuselage that do not meet design standards.
The Aug. 31 FAA memo stated quality-control lapses at certain Boeing 787 Dreamliner production lines, located in South Carolina, could date back to at least a decade ago. The planemaker told aviation authorities that certain parts failed to meet its own "design and manufacturing standards."
The parts in question are "nonconforming" sections of "rear fuselage, or body of the plane, that fell short of engineering standards," WSJ said, citing the memo. Sources told WSJ these revelations might spur accelerated inspections that could cover 900 of the 1,000 jets produced since 2011.
Boeing told aviation regulators that quality lapses of certain fuselage parts do not pose an immediate threat to the air safety of the wide-body jet airliner that is mainly used for international flights.
These new developments come as Boeing pulled eight 787 Dreamliners in August for repairs, discovering they did not meet structural-soundness "requirements for safe flight and landing," according to the FAA memo.
Compound these developing 787 Dreamliner issues with the two fatal accidents of its narrow-body 737 MAX, and Boeing is experiencing widespread manufacturing quality-control lapses.
Boeing has notified all airlines with 787 Dreamliners about the problems, the spokesman told WSJ. The memo said Boeing had requested more time to resolve some of these issues.
According to one person briefed on the FAA's discussions with Boeing, there is a new focus on why manufacturing breakdowns occurred and how computerized safeguards failed to alert production crew on parts that failed to meet design standards.
WSJ said as Boeing engineers investigate flight records to identify 787 Dreamliners with possible issues, the FAA already has knowledge of one of the defects: "the planemaker didn't test how it produces shims, or material that fills gaps between barrel-shaped sections of the jets' fuselages, to ensure they meet requirements." The shims are manufactured at Boeing's factory in North Charleston, South Carolina.
On top of 787 Dreamliner and 737 Max design woes, Boeing has seen six straight months(as of August) of airlines canceling narrow and wide body plane orders as the virus-induced downturn in air travel has doomed the industry for the next several years.
The release of the WSJ story describing Boeing's latest woes comes as the US is on holiday with financial markets closed.
American Airlines Slated To Drop Dozens Of Flights To Smaller Cities As Government Aid Dries Up
With the government set to stop subsidizing the industry, airlines are <gasp> actually going to have to make operational changes to effectively deal with the lack of demand. Oh, the horror of free market forces actually forcing companies to make business changes!
This starts with American Airlines, who is reportedly preparing to drop two dozen small and medium city flights as federal coronavirus aid is set to end. The aid had previously mandated that airlines were not allowed to cut service approaches.
Carriers were previously required to maintain minimum levels of service through September 30 as part of a $25 billion aid package, according to CNBC. They were also prohibited from making layoffs. Under the aid package, American Airlines received $5.8 billion.
The purpose of the deal was to provide both payroll assistance and continued air service around the country despite the fact that planes didn't have any passengers.
American's forthcoming cancellations could start showing up in fall schedules that are set to begin next week, the report said. Changes still have not been finalized and the list of cities that could be cut has not been released. Both airlines and their respective unions have continued to push Congress for another $25 billion in support to keep paying workers through the end of next March, when hopefully demand can recover.
Both the Democrats and Republicans seemed to be in favor of such a deal weeks ago, but negotiations have stalled in Congress for the time being. As a result, the Department of Transportation had informed American Airlines that a planned extension of the benefits was not going to happen for the time being.
A DOT spokesperson commented: “The Department did not propose to extend the obligations, but will use the authority in the CARES Act to monitor ongoing access by the traveling public to the national air transportation system. The Department is also prepared to implement any new provisions of law in this area if enacted by Congress.”
United and Delta have not announced changes to their schedule yet. However, one source told CNBC, the "situation is fluid".
Boeing Is Running Out Of Space To Park Its Newly-Built 787 Dreamliners Which Nobody Wants To Buy
While Morgan Stanley continues to stubbornly repeat that the US economy is undergoing a jolly V-shaped recovery, one would be very hard pressed to observe that in either the number of airline passengers, or the commercial aerospace sector in general, where Boeing has become a poster child for how quickly the fate can turn... and it's not just the company's ill-fated Boeing 737 MAX which may or may not fly again. According to Bloomberg, Boeing is now also running out of space to stash newly-built 787 Dreamliners, as unsold jetliners are now crammed onto "every available patch of pavement on airfields near its factories in Washington and South Carolina."
Citing people familiar with the situation, Bloomberg writes that "dozens of the planes are sitting on the company’s premises" with Uresh Sheth, a closely followed blogger who meticulously tracks the Dreamliners rolling through Boeing’s factories, putting the total somewhere above 50. That’s more than double the number of jets typically awaiting customers along Boeing’s flight lines.
According to Sheth, brand-new widebodies are lined up on a closed off runway at the airport that abuts Boeing’s hulking plant north of Seattle. In North Charleston, 787s are tucked around the delivery center and a paint hangar. The U.S. planemaker has even started sending aircraft to be stored in a desert lot in Victorville, California.
Boeing's troubles with parked jets are nothing new: last year Boeing had so many 737 Maxes after their global ground when it emerged that Boeing had drastically cut corners to save on costs even if it meant risking people's lives, that it commandeered an employee parking lot to store surplus aircraft. Now, as it finally starts to emerge from that crisis, another critical source of cash - the company's marquee jet, the 787 Dreamliner - is under pressure but not do to airworthiness concerns but simply due to the global depression that commercial air traffic has found itself in.
As Bloomberg notes, Boeing has relied on the wide-body jet, produced in record numbers, to help bankroll the $20 billion in costs it has rung up since the Max was banned from commercial flight in March 2019 following two fatal crashes. But as Covid-19 sapped consumer interest in long-range travel this year, "the tally of undelivered Dreamliners has stacked up and created a new financial drag as regulators move closer to clearing the 737’s return."
As a result of the current state of the airline industry, "the next couple of years are just going to be very hard for this airplane,” George Ferguson, a Bloomberg analyst said of the 787 Dreamliner. Some more details:
Demand for the twin-aisle 787, Boeing’s 777 and Airbus’s A350 and A330neo has been especially hard hit as cash-strapped airlines slow or cancel aircraft purchases. Some would-be buyers don’t want to send pilots to claim aircraft in the U.S., where the pandemic is raging. When they are able to start growing fleets, airlines are expected to initially focus on smaller planes for domestic flights before adding larger aircraft for continent-hopping trips.
Boeing also faces a “capacity hangover” after pushing Dreamliner production to a 14-jet monthly pace last year -- a record for wide-body aircraft -- in a market that was already glutted with aircraft, said Richard Aboulafia, an analyst with Teal Group.
“It was one of the few levers they could pull to bring in more cash during what seemed like a crisis, and now looks like a nothingburger,” Aboulafia said of Boeing’s response to the Max grounding. That scandal has been eclipsed by the unprecedented aviation collapse brought on by Covid-19. “No twin-aisle had ever been built at 14-a-month for a very good reason.”
For now, Boeing is acting as if demand will soon rebound: "We continue to closely monitor the commercial marketplace by staying very engaged with our customers around the globe to fully understand short term and long term requirements," Greg Smith, the company’s chief financial officer and executive vice president of enterprise operations, said in a statement.
Unfortunately, such optimism remains wildly misplaced as customers took just three of Boeing’s 787 during May and June, and 36 of the aircraft in the first six months of the year, down more than 50% from 78 deliveries a year earlier.
While Boeing has already lowered 787 production to 10 jets a month, it will need to pursue far deeper cuts over the next two years, which will further sap the company's cash flow. Even so, the manufacturer could be left holding one-third of the more than 100 Dreamliners that J.P. Morgan analyst Seth Seifman projects the company will build this year.
In short, as a result of the global economic recession, Boeing is facing a good, old inventory glut, and absent taking a machete to prices, it will have big problems clearing out the excess inventory.
“It may be difficult to clear this inventory next year,” given that Boeing would have to ramp up deliveries at a time when “when long-range travel may still be under pressure,” Seifman said in a July 15 report.
While Boeing's stock has so far neglected the lack of demand for the company's cash cow, that will soon change. Boeing’s ballooning 787 inventory and deferred production costs should come into sharper focus over the next two weeks as key customers like American Airlines and United Airlines report earnings, followed Boeing itself on July 29.
For years after the 787 Dreamliner made its commercial debut in 2011, taped up aircraft awaiting retrofitted parts dotted Paine Field, adjacent to Boeing’s factory in Everett, Washington. For Sheth, there’s a sense of déjà vu to the growing glut.
“I have no doubt they are going to recover from that downturn,” Sheth said. “But at this point they’re probably going to have to cut production even lower because they can’t continue on this trajectory.”
All of which means even lower future income, more layoffs and - eventually - a return to the bargaining table to ask Uncle Sam for some bailout cash, which Boeing has so far managed to avoid.
The NTSB has released its findings on Atlas Air 5Y3591, a 767 freighter flight that crashed on approach to Houston (IAH) in February last year. The release comes ahead of a final report which is expected within the next few weeks. In the immediate aftermath of the crash, observers were perplexed and alarmed at the sudden and steep descent the 767 appeared to have experienced as it was performing an otherwise relatively normal approach. The aircraft in question was Boeing 767-375(ER)(BCF) registered N1217A. ADS-B data from the flight can be found here.
The findings indicate the cause of the crash was disorientation on the part of the first officer. However, the NTSB also points to the captain’s failure to properly monitor the situation, as well as failings in industry standards for performance assessment that failed to catch “aptitude related deficiencies and maladaptive stress response” on the part of the first officer. As is often the case, it was a sequence of failings that led to the deaths of captain, first officer, and an additional pilot in the jumpseat.
However, at the heart of the sequence of events that led the 767 freighter to rapidly descend into the ground was what is known as a “pitch-up somatogravic illusion,” a phenomenon in which an increase in acceleration can create the illusion that the aircraft is pitching up. That happened as a result of the go-around mode being activated inadvertently. The first officer evidently believed the aircraft was stalling despite no stall warning activating in the flight deck.
The NTSB released the following animation of the flight:
The captain was also distracted because he was setting up the approach and speaking to ATC, according to the NTSB, which said “his attention was diverted from monitoring the airplane’s state and verifying that the flight was proceeding as planned. This delayed his recognition of, and his response to, the first officer’s unexpected actions that placed the plane in a dive. Investigators also concluded the captain’s failure to command a positive transfer of control of the airplane as soon as he attempted to intervene on the controls enabled the first officer to continue to force the airplane into a steepening dive.”
On top of that, investigators found that the first officer had performance deficiencies which he took deliberate steps to conceal, and might have led Atlas Air to take appropriate action had they known of them in the first place.
“The first officer in this accident deliberately concealed his history of performance deficiencies, which limited Atlas Air’s ability to fully evaluate his aptitude and competency as a pilot,” said NTSB Chairman Robert Sumwalt. “Therefore, today we are recommending that the pilot records database include all background information necessary for a complete evaluation of a pilot’s competency and proficiency.”
As a result of the investigation, the NTSB has issued six new safety recommendations to the FAA, addressing “flight crew performance, industry pilot hiring process deficiencies, and adaptations of automatic ground collision avoidance system technology.”
Airline Industry is expected to lose US$84 billion in 2020 according to the International Air Transport Association (IATA) which has just released its financial outlook for the global air transport industry.
The net profit margin will plummet to -20.1 percent with revenues crashing 50 percent to $419 billion from $838 billion in 2019.
In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.
“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that’s a loss of $84.3 billion. It means that—based on an estimate of 2.2 billion passengers this year—airlines will lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” said Alexandre de Juniac, IATA’s Director General and CEO.
“Provided there is not a second and more damaging wave of COVID-19, the worst of the collapse in traffic is likely behind us. A key to the recovery is the universal implementation of the re-start measures agreed through the International Civil Aviation Organization (ICAO) to keep passengers and crew safe. And, with the help of effective contact tracing, these measures should give governments the confidence to open borders without quarantine measures. That’s an important part of the economic recovery because about 10% of the world’s GDP is from tourism and much of that depends on air travel. Getting people safely flying again will be a powerful economic boost,” said de Juniac.
IATA says passenger demand has evaporated as international borders closed and countries locked down to prevent the spread of the virus. This is the biggest driver of industry losses. At the low point in April, global air travel was roughly 95 percent below 2019 levels.
Overall traffic levels (in Revenue Passenger Kilometer) for 2020 are expected to fall by 54.7 percent compared to 2019 with passenger numbers roughly halve to 2.25 billion, approximately equal to 2006 levels.
Capacity, however, cannot be adjusted quickly enough with a 40.4 percent decline expected for the year.
The problem for airlines is made worse as passenger revenues are expected to fall to $241 billion (down from $612 billion in 2019). This is greater than the fall in demand, reflecting an expected 18 percent fall in passenger yields as airlines try to encourage people to fly again through price stimulation. Load factors are expected to average 62.7 percent for 2020, some 20 percentage points below the record high of 82.5 percent achieved in 2019.
And costs are not falling as fast as demand. Forecast total expenses of $517 billion are 34.9 percent below 2019 levels but revenues will see a 50 percent drop. Non-fuel unit costs will rise sharply by 14.1%, as fixed costs are spread over fewer passengers. Lower utilization of aircraft and seats as a result of restrictions will also add to rising costs.
A Boeing engineer who last year lodged an internal ethics complaint alleging serious shortcomings in development of the 737 MAX has written to a U.S. Senate committee asserting that systemic problems with the jet’s design “must be fixed before the 737 MAX is allowed to return to service.”
The letter to the Senate, a copy of which was obtained by The Seattle Times, was written by engineer Curtis Ewbank, a 34-year-old specialist in flight-deck systems whose job when the MAX was in early stages of development involved studying past crashes and using that information to make new planes safer.
His letter, sent earlier this month, argues that it’s not enough for Boeing to fix the flawed Maneuvering Characteristics Augmentation System (MCAS) that’s known to have brought down the aircraft in two crashes in Indonesia and Ethiopia.
“I have no doubt the FAA and lawmakers are under considerable pressure to allow the 737 MAX to return to service as quickly as possible and as soon as the public MCAS flaw is fixed,” Ewbank told the Senate. “However, given the numerous other known flaws in the airframe, it will be just a matter of time before another flight crew is overwhelmed by a design flaw known to Boeing and further lives are senselessly lost.”
He goes on to suggest similar shortcomings in the flight-control systems may affect the safety of Boeing’s forthcoming 777X widebody jet.
Ewbank’s letter also reveals that he has been interviewed about his concerns by the FBI, which suggests his allegations have at least been considered as part of the Justice Department’s probe into what went wrong on the 737 MAX and whether the actions of anyone at Boeing were criminal.
He mentions he has also delivered details of his allegations to the lead investigator on the U.S. House Committee on Transportation, chaired by Rep. Peter DeFazio, D-Ore.
In 2014, during early work on the MAX’s development, Ewbank worked unsuccessfully to have Boeing upgrade the MAX’s flight-control systems by adding a new data measurement system called Synthetic Airspeed that would have served as a check on multiple sensors. If it had been implemented, he believes it might have prevented the fatal crashes.
Ewbank’s original internal ethics complaint, first reported last October by The Seattle Times, alleged that Boeing rejected his safety upgrades because of management’s focus on schedule and cost considerations and the insistence that anything that might require more pilot training would not be considered.
Ewbank criticizes not only Boeing for its design of the MAX but also the FAA for approving the design without proper oversight.
“The 737 MAX’s original certification was accomplished with hand-waving and deception to hide the numerous ways the 1960s-era design of the 737 does not meet current regulatory standards,” he wrote.
And he hit out at a recent Department of Transportation (DOT) advisory panel report on the MAX crashes that recommended only minor changes to the way airplanes are certified, preserving Boeing’s central role in that process. Ewbank called the report “a serious threat to aviation safety and the flying public.”
“If the FAA was truly regulating in the public interest, it would take action against Boeing for its continued deception and gross errors in the design and production of the 737 MAX by withdrawing Boeing’s production certificate,” he concluded.
Ansley Lacitis, deputy chief of staff for Democratic Sen. Maria Cantwell of Washington, said her office “was made aware of the letter right before the hearing” on Wednesday.
“The first step of a whistleblower investigation is to make contact with the whistleblower and we have done that,” Lacitis said. “We take these and other allegations seriously and continue to investigate them.”
In a statement, Boeing said company officials have not seen the letter.
“Boeing offers its employees a number of channels for raising concerns and complaints and has rigorous processes in place that ensure complaints receive thorough consideration and protect employee confidentiality,” the statement said. “Boeing does not comment on the substance or existence of such internal complaints.”
Boeing’s statement adds that “when the MAX returns to service, it will be one of the most thoroughly scrutinized aircraft in history, and we have full confidence in its safety.”
During the APU engine start, the IGV (Inlet Guide Vanes) are supposed to be closed. This allows all incoming air to be directed into the combustion chamber. After start with a air demand (main engine start or air conditioning pack operation), the IGV vanes open allowing bleed air output.
We purposely pulled the IGV actuator arm out (vanes open) to see if it would would close them on initial rotation. It did not.
With the drain on the air bleed system, the APU could not accelerate beyond approximately 30% and it would shut down.
Boeing is also seeking federal aid from the U.S. government, but won't do so if it requires the government to take an equity stake in the company.
Over the weekend Boeing announced it is "extending the temporary suspension of operations at all Puget Sound area and Moses Lake sites until further notice" after about 135 Boeing employees have tested positive for COVID-19.
"These actions are being taken in light of the company’s continuing focus on the health and safety of employees, current assessment of the spread of COVID-19 in Washington state, the reliability of the supply chain and additional recommendations from government health authorities," Boeing said in a statement.
The decision affects about 30,000 production employees, who will no longer receive pay after Wednesday. Despite still receiving medical benefits, they now must take vacation and sick time or apply for unemployment.
With things at Boeing going just about as badly as possible, it will be interesting to see how the company comes out of all of this.
Even once the coronavirus subsides, Boeing is still faced with its 737 MAX issues and lack of any net orders for its airplanes.
Due to the ongoing coronavirus outbreak in Washington, Boeing announced Monday it would temporarily shut down its Puget Sound production operations starting on March 25.
Boeing officials revealed in a public statement the temporary shutdown would last 14 days and impact the more than 70,000 employees in the Puget Sound region.
During the closure, employees will be asked to work from home as the company conducts full cleanup efforts and develops a “rigorous criteria for return to work.” Workers who can do their job from home will be paid for the initial 10 working days of the suspension.
“We will keep our employees, customers and supply chain top of mind as we continue to assess the evolving situation,” Boeing CEO Dave Calhoun said in the release. “This is an unprecedented time for organizations and communities across the globe.”
Boeing’s announcement came just a day after a report from the Seattle Times (h/t KOMONews.com) said an employee at the company’s production plant in Everett died from coronavirus. The worker, identified as Elton Washington, reportedly worked for the manufacturer for 28 years.
Washington Governor Jay Inslee released a statement regarding the closure:
“I spoke with Boeing Commercial CEO Stan Deal early this morning. I applaud Boeing’s decision to implement an orderly shutdown and continue to pay its workers during this difficult time. Now is a time for bold actions like these, and we will continue to look at what can be done statewide.”
Last week, Boeing announced CEO Dave Calhoun and Board Chairman Larry Kellner would forego all pay until the end of 2020 and the company will suspend its dividend and extend its pause of any share repurchasing until further notice.
Congress Rips Boeing's "Culture Of Concealment" & FAA's 'Jeopardizing' Public In Scathing 737 MAX Report
By Tyler Durden
In a sense finally making the long developing scandal official in terms of where blame lies and who covered it up, Congress has blasted Boeing's "culture of concealment" which recklessly pursued cost-cutting over safety, made worse by the Federal Aviation Administration’s woeful lack of oversight, leading to twin deadly crashes of Boeing's 737 MAX jets and 346 lives lost in late 2018 and March 2019. The report cites "efforts to obfuscate information" involving an automated system that "violated Boeing’s own internal design guidelines."
Preliminary findings issued by Democrats on the House Transportation Committee Friday afternoon found Boeing executives and FAA regulators ignored the fatal software glitch which was simply shipped by default with all new 737 MAX planes instead of being repaired.
Boeing “failed in its duty to identify key safety problems and to ensure they were adequately addressed during the certification process,” the House committee found.
"Friday’s report details Boeing’s determination at various levels — years before the MAX won approval by the Federal Aviation Administration — to avoid putting any pilots through costly ground-simulator training," the WSJ writes. And further summarizes, "That single-minded goal was evident across Boeing’s engineering, marketing and management ranks, according to the report, and resulted in various efforts to mislead or withhold information from FAA officials during the lengthy certification process."
The Congressional report, which comes as the result of a series of five public hearings into the MAX's design and production after it was ground world-wide last March, also excoriated the FAA for its “grossly insufficient” review of the plane which ultimately "jeopardized the safety of the flying public” with its “inherent conflicts of interest” — even though it's supposed to be the final impartial safety watchdog.
In order to avoid greater FAA scrutiny and increased pilot training requirements, Boeing practiced a “Culture of Concealment” that withheld crucial information from the FAA, its airline customers, and pilots.
Inherent conflicts of interest among authorized representatives of the FAA, who are Boeing employees authorized to perform certification work on behalf of the FAA, ”jeopardized the safety of the flying public.”
Boeing’s influence over the FAA’s oversight resulted in FAA management rejecting safety concerns raised by the agency’s own technical experts at the behest of Boeing.
After these and other scathing critiques in the Congressional findings, the FAA instead of a full-frontal acknowledgement to the public of its role leading up to disasters involving hundreds of deaths and grieving relatives, merely lamely stated that “we are a learning agency and welcome the scrutiny.”
“The lessons learned from the investigations into the tragic accidents of Lion Air Flight 610 and Ethiopian Airlines Flight 302 will be a springboard to an even greater level of safety,” the FAA statement added.
However, we doubt that few among the traveling public will find such an 'assurance' believable or comforting, also considering the potential expanding nature of the safety issues and cover-up, as the WSJ notes additionally: "More broadly, the reports also details examples of FAA managers overruling safety concerns of their own technical expertsrelated to another Boeing airliner, the Boeing 787."
"Absolutely Unacceptable" - Leaked Boeing Memo Shows 'Debris' Found In 737 MAX Fuel-Tanks
By Tyler Durden
With airline after airline pushing back their 'return-to-service' dates based on Boeing's total lack of clarity on the path forward for the 737 MAX, the troubled aircraft maker (and the troubled aircraft) now faces more problems.
According to an internal memo, seen by Reuters, Boeing found debris that could pose potential safety risks in the fuel tanks of several 737 MAX aircraft that are in storage and waiting to be delivered to airlines.
To be clear about what 'debris' means, Reuters details that:
"an industrial term for rags, tools, metal shavings and other materials left behind by workers during the production process."
And notes that this 'debris' problem has been a quality control issue for various Boeing aircraft, such as its KC-46 tankers.
Foreign-object debris (FOD) “is absolutely unacceptable. One escape is one too many,” Mark Jenks, a Boeing vice president and general manager of the 737 program, said in a message to employees that was viewed by Reuters.
“With your help and focus, we will eliminate FOD from our production system,”
The FOD problem on the MAX was first reported Tuesday on Scott Hamilton’s Leeham.net aviation site:
“There’s a systemic issue with Boeing’s quality control that hasn’t been corralled yet,” said Hamilton in an interview.
“This is not related to the MAX crashes or exclusively a MAX issue. Boeing has these FOD issues on other airplane programs.”
A Boeing spokesman confirmed the memo’s authenticity; and Boeing now having to inspect more than 400 stored 737 Max jets, but Bernard Choi said “it’s still undecided if we will inspect the rest” of the MAX fleet - another 385 aircraft that were delivered to customers but have been grounded for almost a year and are parked at airfields around the world.
“Obviously, we’ll do what’s right for safety,” Choi added.
Boeing spokesman Chaz Bickers was, however, careful to claim that the company does not see the debris as contributing to delays in the jet’s return to service. (The inspections will take two to three days per aircraft. Fuel must be drained from the wings before a mechanic can go in and do a thorough check.).
The Federal Aviation Administration said it was aware that Boeing “is conducting a voluntary” inspection for debris in the undelivered aircraft “as part of the company’s ongoing efforts to ensure manufacturing quality.”
It may delay the airlines' decision to accept delivery of the jets though (as its not exactly reassuring to crew members and passengers of the company’s commitment to manufacturing quality and safety!)
Slipping through the cracks of the Boeing controversy - which has taken on new twists and turns almost daily - were comments we recently uncovered by a former Boeing quality manager, who said last month that he thinks Boeing's problems aren't just limited to the 737.
John Barnett was a quality manager for Boeing for 30 years before he was transferred to South Carolina to work on the 787, according to Big Think.
It was there that a new leadership team who had previously worked on Boeing's military projects began overseeing work on the commercial airliner.
Barnett says that team lowered safety standards significantly. He stated: "They started pressuring us to not document defects, to work outside the procedures, to allow defective material to be installed without being corrected. They started bypassing procedures and not maintaining configurement control of airplanes, not maintaining control of non-conforming parts — they just wanted to get the planes pushed out the door and make the cash register ring."
At first, it was just administrative issues, Barnett said. But then, it got worse.
"Over time it got worse and worse. They began to ignore defective parts installed on the planes and basic issues related to aircraft safety," he said.
According to Barnett, one audit uncovered that 25% of oxygen masks didn't work. Defective parts were getting lost in the system before being discovered flying on aircraft. Barnett says he remembered "several defective bulkheads being installed without having been repaired."
He also said that there was an issue with metal slivers. 3-inch-long slivers of razor-sharp metal would fall into areas where planes have sensitive wiring and electronics, he said.
He continued: "That surface below the floor board is where all of your flight control wires are, that's where all of your electronic equipment is. It controls systems on the airplane, it controls the power of the airplane. All of your electronic equipment is down where all of these metal slivers are falling."
He said these slivers would cause shorts and fires at the plant. As planes vibrate, these metal slivers work their way into wire bundles and can cause issues during flights, he said. Barnett filed complaints with multiple members of the Boeing team, which he said led to his reassignment to a department that isolated him.
The FAA performed an audit substantiating his claims and even telling Boeing that no more planes could be delivered with those metal slivers. Meanwhile, 800 planes that include them have already been delivered and Boeing felt customers didn't need to be informed.
"Every 787 out there has these slivers out there," Barnett said.
Barnett also filed a complaint with OSHA, which is reportedly still under investigation.
He concluded: "...as far as the 787, I would change flights before I would fly a 787. I've told my family — please don't fly a 787. Fly something else. Try to get a different ticket. I want the people to know what they are riding on."
Lawmakers have finally followed up last week's bombshell release of internal Boeing communications with more extremely damning internal messages exchanged by employees. This time, the messages revealed that Boeing employees successfully persuaded Indonesia's Lion Air to forego forcing their pilots to use a full flight simulator to train them on the 737 MAX 8.
According to Bloomberg, which published unredacted copies of the messages, offering full flight simulator training to Lion Air would undermine a key selling point of the 737 MAX 8: The fact that Boeing advertised the plane as needing no additional training for pilots and crew, apart from a basic computer-based course.
One Boeing employee wrote in June 2017 - a little over a year before the deadly Lion Air crash in October 2018 that helped inspire the universal grounding of the plane by regulators - that "friggin Lion Air was pushing for a "flight sim."
However, the Boeing employee promised his co-workers that he would "unscrew" the situation.
"Now friggin Lion Air might need a sim to fly the MAX, and maybe because of their own stupidity. I’m scrambling trying to figure out how to unscrew this now! idiots," one Boeing employee wrote in June 2017 text messages obtained by the company and released by the House Transportation and Infrastructure Committee.
In response to news about Lion Air's request, another employee exclaimed that their sister airline, Malindo Air, was already flying the MAX without need simulators.
In response, a Boeing colleague replied: “WHAT THE F%$&!!!! But their sister airline is already flying it!” That was an apparent reference to Malindo Air, the Malaysian-based carrier that was the first to fly the Max commercially.
However, Boeing's fixation on the bottom line ended up being a penny wise and a pound foolish. After all, in a report on the Oct. 29, 2018 accident, Indonesia’s National Transportation Safety Committee explicitly cited a failure by Boeing to tell pilots about MCAS, a flight control feature that has been implicated in MAX crashes in Indonesia and Ethiopia.
Apparently, it only took Boeing employees, including the company's chief technical pilot, to convince Indonesia to forego the training.
The communications include a 2017 email from Boeing’s chief technical pilot on the 737 in which he crowed to colleagues: "Looks like my jedi mind trick worked again!" The email was sent two days after the earlier messages expressing alarm about Lion Air potentially demanding simulator training.
Attached was a forwarded email exchange in which the person warned an unnamed recipient against offering simulator training for Max pilots, pushing instead for the computer-based course that regulators had already approved for flight crews transitioning to the Max from earlier 737 models.
"I am concerned that if [redacted] chooses to require a Max simulator for its pilots beyond what all other regulators are requiring that it will be creating a difficult and unnecessary training burden for your airline, as well as potentially establish a precedent in your region for other Max customers," the Boeing pilot wrote in the forwarded message.
While Lion Air was not identified in the redacted emails, the discussions are consistent with those Boeing held with Lion Air at the time, according to people familiar with the matter.
Once again, lawmakers have released damning communications from internal Boeing employees revealing a glaring negligence that appears to have been a cause, in part, of two deadly accidents that killed a combined 346 people.
These exchanges will almost certainly be cited in lawsuits by victims' family members alleging gross negligence on Boeing's behalf.
And once again, Boeing shares don't appear to care.
The company expressed regret at the embarrassing communications it sent to investigators on Thursday, which included a comment that “this airplane is designed by clowns, who are in turn supervised by monkeys.”
By Natalie Kitroeff
Boeing employees mocked federal rules, talked about deceiving regulators and joked about potential flaws in the 737 Max as it was being developed, according to over a hundred pages of internal messages delivered Thursday to congressional investigators.
“I still haven’t been forgiven by God for the covering up I did last year,” one of the employees said in messages from 2018, apparently in reference to interactions with the Federal Aviation Administration.
The most damaging messages included conversations among Boeing pilots and other employees about software issues and other problems with flight simulators for the Max, a plane later involved in two accidents, in late 2018 and early 2019, that killed 346 people and threw the company into chaos.
The employees appear to discuss instances in which the company concealed such problems from the F.A.A. during the regulator’s certification of the simulators, which were used in the development of the Max, as well as in training for pilots who had not previously flown a 737.
“Would you put your family on a Max simulator trained aircraft? I wouldn’t,” one employee said to a colleague in another exchange from 2018, before the first crash. “No,” the colleague responded.
In another set of messages, employees questioned the design of the Max and even denigrated their own colleagues. “This airplane is designed by clowns, who are in turn supervised by monkeys,” an employee wrote in an exchange from 2017.
The release of the communications — both emails and instant messages — is the latest embarrassing episode for Boeing in a crisis that has cost the company billions of dollars and wreaked havoc on the aviation industry across the globe. The Max has been grounded for nearly 10 months, after the two deadly crashes. A software system developed for the plane was found to have played a role in both accidents, and since then the company has been working to update the system.
There is still no indication when the Max might be cleared to fly again, as the company and regulators continue to discover new potential flaws with the plane.
The messages threaten to further complicate Boeing’s tense relationship with the F.A.A. Both the company and agency indicated Thursday that the messages raised no new safety concerns, but they echoed troubling internal communications among Boeing employees that were previously made public.
In several instances, Boeing employees insulted the F.A.A. officials reviewing the plane.
In an exchange from 2015, a Boeing employee said that a presentation the company gave to the F.A.A. was so complicated that, for the agency officials and even himself, “it was like dogs watching TV.”
Several employees seemed consumed with limiting training for airline crews to fly the plane, a significant victory for Boeing that would benefit the company financially. In the development of the Max, Boeing had promised to offer Southwest a discount of $1 million per plane if regulators required simulator training.
In an email from August 2016, a marketing employee at the company cheered the news that regulators had approved a short computer-based training for pilots who have flown the 737 NG, the predecessor to the Max, instead of requiring simulator training.
“You can be away from an NG for 30 years and still be able to jump into a MAX? LOVE IT!!” the employee says, following up later with an email noting: “This is a big part of the operating cost structure in our marketing decks.”
Boeing on Thursday expressed regret over the messages. “These communications contain provocative language, and, in certain instances, raise questions about Boeing’s interactions with the F.A.A. in connection with the simulator qualification process,” the company said in a statement to Congress. “Having carefully reviewed the issue, we are confident that all of Boeing’s Max simulators are functioning effectively.”
“We regret the content of these communications, and apologize to the F.A.A., Congress, our airline customers and to the flying public for them,” Boeing added. “The language used in these communications, and some of the sentiments they express, are inconsistent with Boeing values, and the company is taking appropriate action in response. This will ultimately include disciplinary or other personnel action, once the necessary reviews are completed.”
The messages outraged several lawmakers, who saw a disregard for safety and broader problems with the culture at the company.
Senator Richard Blumenthal, Democrat of Connecticut, said in an interview that he would push for new congressional hearings to question Boeing leadership about the “astonishing and appalling” messages.
Boeing said that it notified the F.A.A. about the documents in December and that it had “not found any instances of misrepresentations to the F.A.A. with its simulator qualification activities,” despite the employee’s comment about “covering up” issues with the simulator.
Lynn Lunsford, a spokesman for the F.A.A., said in a statement that the messages did not reveal any new safety risks.
“Upon reviewing the records for the specific simulator mentioned in the documents, the agency determined that piece of equipment has been evaluated and qualified three times in the last six months,” Mr. Lunsford said. “Any potential safety deficiencies identified in the documents have been addressed.”
Mr. Lunsford added that, “while the tone and content of some of the language contained in the documents is disappointing, the F.A.A. remains focused on following a thorough process for returning the Boeing 737 Max to passenger service.”
The relationship between Boeing and the F.A.A. has been a complicating factor for the company as it works to persuade international regulators that the Max is ready to fly. Last month, Boeing fired its chief executive, Dennis A. Muilenburg, whose optimistic projections about the plane’s return to service created a rift with the regulator.
Stephen Dickson, the new chief of the F.A.A., has struck a more assertive tone in public comments about the Max, urging his employees to ignore outside pressure to quickly lift the plane’s grounding and telling Boeing that there is no set timetable for the Max to return.
In a meeting with Mr. Muilenburg last month, Mr. Dickson told the company not to make any requests of the regulator and to instead focus on completing the paperwork necessary for regulators to evaluate the update.
Last year, Boeing disclosed internal messages from 2016, in which a top pilot working on the plane told a colleague that he was experiencing trouble controlling the Max in a flight simulator and believed that he had misled the F.A.A.
“I basically lied to the regulators (unknowingly),” the pilot, Mark Forkner, said to his colleague, Patrik Gustavsson.
Boeing did not inform the F.A.A. about the messages when the company first discovered them, waiting until about two weeks before Mr. Muilenburg was set to testify in front of Congress to send them to lawmakers. The conversation, which took place before the Max was approved to fly, angered key F.A.A. officials, who felt misled by the company, according to three people familiar with the matter.
After the congressional hearings, Boeing moved Mr. Gustavsson out of his role working on the certification of new planes
On Thursday, Representative Peter DeFazio, a Democrat from Oregon who is leading the House investigation into the development of the 737 Max, called the newly released messages “incredibly damning.”
“They paint a deeply disturbing picture of the lengths Boeing was apparently willing to go to in order to evade scrutiny from regulators, flight crews and the flying public,” he added, “even as its own employees were sounding alarms internally.”
The Federal Aviation Administration (FAA) conducted an internal audit in December of the Boeing 737 Max and found wiring issues could potentially cause a "catastrophic" short circuit at the rear of the plane and lead to a crash, a senior engineer at Boeing and three people familiar with the matter told The New York Times.
Boeing is examining if two wiring harnesses at the rear of the plane are too close together that would result in an electric short that would cause the plane's tail to malfunction in flight, said one of the sources.
If Boeing decides to fix the wiring problem, it would mean that more than 800 Max jets would have to see wiring reconfiguration.
Of course, Boeing told The Times that the fix is relatively simple. Spokesman Gordon Johndroe said Sunday the "identified issue is part of a rigorous process, and we are working with the FAA to perform the appropriate analysis. It would be premature to speculate as to whether this analysis will lead to any design changes."
It was unclear, however, if simple also means cheap, and some have speculated that a full-blown recall could cost tens ofd billions.
An FAA statement Sunday said investigators are "re-analyzing certain findings from a recent review of the proposed modifications to the Boeing 737 MAX." The agency will "ensure that all safety-related issues identified during this process are addressed."
The FAA said the wiring harnesses are too close together, located at the rear of the plane, would cause the motors that control the stabilizer, a horizontal fin on a plane's tail, to malfunction (short circuit) and could lead to a potentially "catastrophic" crash.
Max engines have also become another focus for FAA investigators.
All of these issues, of course, are separate from the MCAS software that was likely the cause of two separate Max crashes, killing 346 people. New Max issues could delay the ungrounding even further. There is no clear timeline of when the planes will return to the air.
Meanwhile, confirming that things are going from bad to worse, the WSJ reported that Boeing is mulling raising more debt to "improve finances", read fund buybacks, as costs related to the grounding of its 737 MAX are raising. The paper reports that Boeing is also considering cutting CAPEX, freezing acquisitions and cutting on R&D to save cash. In total, analysts expect Boeing to raise as much as $5BN in additional debt to help cover expenditures that could rise to $15BN in 1H 2020. It was not clear if all of this new money, or just most of it, would to repurchasing BA shares.
Airbus beats goal with 863 jet deliveries in 2019, ousts Boeing from top spot
By Tim Hepher
Airbus has become the world’s largest planemaker for the first time since 2011 after delivering a forecast-beating 863 aircraft in 2019, seizing the crown from embattled U.S. rival Boeing (BA.N), airport and tracking sources said on Wednesday.
A reversal in the pecking order between the two giants had been expected as a crisis over Boeing’s grounded 737 MAX drags into 2020. But the record European data further underscores the distance Boeing must travel to recoup its market position.
Airbus, which had been forced by its own industrial problems to cut its 2019 delivery goal by 2-3% in October, deployed extra resources until hours before midnight to reach 863 aircraft for the year, compared with its revised target of 860 jets.
Deliveries rose 7.9 % from 800 aircraft in 2018.
Airbus declined to comment on the figures, which must be audited before they can be finalized and published.
Planemakers receive most of their revenues when aircraft are delivered - minus accumulated progress payments - so the end-year delivery performance is closely monitored by investors.
Airbus’s tally, which included around 640 single-aisle aircraft, broke industry records after it diverted thousands of workers and canceled holidays to complete a buffer stock of semi-finished aircraft waiting to have their cabins adjusted.
Airbus has been hit by delays in fitting the complex new layouts on A321neo jets assembled in Hamburg, Germany, resulting in dozens of these and other models being stored in hangars to await last-minute configurations and the arrival of more labor.
Such out-of-sequence work drives up costs and could have a modest impact on Airbus profit margins, but the impact will be largely blunted by the high volume of planes and already solid profitability for such single-aisle aircraft, analysts say.
Still, the problems in fitting complex cabins have curtailed Airbus’s ability to take advantage of the market turmoil surrounding Boeing’s 737 MAX - grounded since March following two fatal accidents.
Boeing delivered 345 mainly long-haul jets between January and November, less than half the number of 704 achieved in the same period of 2018, when the MAX was being delivered normally. For the whole of 2018, Boeing had delivered 806 aircraft.
Airbus production plants traditionally halt over Christmas and New Year. But the company’s delivery centers and completion facilities were humming well into the afternoon of New Year’s Eve to allow Asian and other airlines to fly away new jets.