Boeing To Compensate Families Of Victims Of Ethiopia 737 MAX Crash

(FILES) In this file photo taken on November 28, 2017, an Ethiopian Airline Boeing 737-700 aircraft takes off from Felix Houphouet-Boigny Airport in Abidjan. ISSOUF SANOGO / AFP

 

Boeing has reached an agreement with the families of victims of the 737 MAX crash that killed 157 people in Ethiopia, and has admitted responsibility for the crash, according to legal documents filed in a Chicago court on Wednesday. 

“Boeing is committed to ensuring that all families who lost loved ones in the accidents are fully and fairly compensated for their loss,” the company said in a statement passed to AFP.

“By accepting responsibility, Boeing’s agreement with the families allows the parties to focus their efforts on determining the appropriate compensation for each family,” the aerospace giant said.

Flight 302 to Nairobi, operated by Ethiopian Airlines, crashed southeast of the capital Addis Ababa six minutes after taking off on March 10, 2019.

READ ALSO: Boeing Uncovers Another Defect On 787 Dreamliner

The accident resulted in the grounding of the 737 MAX fleet, and the worst crisis in the history of the American aircraft manufacturer, as it came after a 737 MAX operated by Lion Air crashed in Indonesia in October 2018, killing 189 people.

The lead lawyers for victims’ families hailed the agreement as “historic” and a “significant milestone for the families in their pursuit of justice against Boeing.”

“It will ensure they are all treated equitably and eligible to recover full damages,” said lawyers Robert Clifford, Steven Marks and Justin Green in a statement.

The agreement proposed Wednesday does not mention specific sums, but said that jurors will be responsible for assessing amounts of compensation based on the evidence presented.

The families of the victims will be able to take steps to obtain compensation in US courts. The 157 people who died were of 35 different nationalities.

“We extend our deepest condolences to the families of those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302,” Boeing said.

“Since the accidents, Boeing has made significant changes as a company, and to the design of the 737 MAX, to ensure that accidents like those never happen again,” it added.

The 737 MAX, a new version of the legendary medium-haul plane originally released in 1967, tarnished the reputation of the aircraft manufacturer and cost it billions of dollars.

The planes remained grounded for 20 months before being gradually allowed to fly around the world since the end of 2020. Airlines have brought back into service more than 200 of the aircraft.

A hearing is scheduled for next Tuesday in Chicago to ratify this preliminary agreement. There will then be mediations, but if they fail, each family will be able to present their case to a jury to seek damages, according to the law of the state of Illinois, where Chicago is located.

In January, Boeing agreed to pay more than $2.5 billion to settle certain lawsuits. The aeronautical giant admitted that two of its employees had misled the FAA, the aviation regulator in the United States.

 

AFP

Boeing Uncovers Another Defect On 787 Dreamliner

Boeing said on October 14, 2021, it will rework undelivered 787 Dreamliner planes after uncovering another defect on the jet, which has been halted for deliveries since May.

 

Boeing said Thursday it will rework undelivered 787 Dreamliner planes after uncovering another defect on the jet, which has been halted for deliveries since May.

The company was notified by a supplier that some 787 parts “were improperly manufactured,” a Boeing spokesman told AFP, confirming aspects of a Wall Street Journal story.

“While our investigation is ongoing, we have determined that this does not present an immediate safety of flight concern for the active in-service fleet,” the Boeing spokesman said.

“Yet-to-deliver airplanes will be reworked as necessary prior to customer delivery. Any potential fleet actions will be determined through our normal review process and confirmed with the FAA.”

The Journal story, citing people familiar with the matter, described this issue as involving “certain titanium parts that are weaker than they should be” on jets built over the last three years.

Boeing halted deliveries of the 787 in May following a number of other problems on the plane and as company officials sought to reach an agreement with the Federal Aviation Administration (FAA) on a methodology to inspect the planes.

Boeing announced in July that it had spotted additional problems near the nose of the plane and was working to fix them.

The latest problem comes after a string of issues on its top-selling planes, particularly the 737 MAX, two of which crashed in 2018 and 2019, claiming 346 lives and leading to a 20-month grounding of the aircraft.

The Journal story also said the FAA was probing a series of quality-control issues, claiming the company allowed unqualified staff to sign off on quality checks.

Boeing declined to comment on the probe, saying it would be “premature” to discuss the issues with a party other than the FAA.

The FAA did not immediately respond to a request for comment.

Boeing Calls For Grounding Of Some 777s After Denver Engine Fire

An American Airlines Boeing 777 passenger plane is seen over the Courtyard by Marriott London Heathrow Airport hotel taking off from London Heathrow Airport in west London on February 14, 2021. 
An American Airlines Boeing 777 passenger plane is seen over the Courtyard by Marriott London Heathrow Airport hotel taking off from London Heathrow Airport in west London on February 14, 2021. JUSTIN TALLIS / AFP

 

Boeing called for the grounding of 128 of its 777 planes across the world on Sunday as US regulators investigated a United Airlines flight whose engine caught fire and fell apart over a suburban American community.

United, Korean Air, and Japan’s two main airlines confirmed they had already suspended operations of 62 planes fitted with the same family of engines which scattered debris over Denver on Saturday.

The US National Transportation and Safety Board is also investigating the incident, in which no one was hurt.

Boeing warned similarly fitted planes should be taken out of service until the Federal Aviation Authority had determined an inspection procedure.

“While the NTSB investigation is ongoing, we recommended suspending operations of the 69 in-service and 59 in-storage 777 aircraft powered by Pratt & Whitney 4000-112 engines,” the company said.

Japan Airlines (JAL) and All Nippon Airways (ANA) said they had respectively grounded 13 and 19 planes using PW4000 engines but had avoided flight cancelations by using other aircraft.

The Japanese transport ministry said it had ordered stricter inspections of the engine after a JAL 777 plane flying from Haneda to Naha experienced trouble with “an engine in the same family” in December.

United said it had voluntarily removed 24 Boeing 777 planes from service and expected “only a small number of customers to be inconvenienced.”

South Korea’s transport ministry said it had no immediate plans to ground planes, adding it was monitoring the situation.

But Korean Air, the country’s largest airline and flag carrier, said it had grounded all six of its Boeing 777s with PW4000 engines currently in operation.

“We have decided to ground all our PW 4000 powered 777s, and we expect the FAA’s updated protocol soon,” the company told AFP in an emailed statement.

The FAA earlier ordered extra inspections of some passenger jets.

Steve Dickson, the head of the regulator, said he had consulted with experts and that some airplanes would “likely” be removed from service.

“I have directed them to issue an Emergency Airworthiness Directive that would require immediate or stepped-up inspections of Boeing 777 airplanes equipped with certain Pratt & Whitney PW4000 engines,” he said in a statement.

Dickson added that a preliminary safety data review pointed to a need for additional checks of the jet engine’s fan blades, which were unique to the engine model and only used on 777 planes.

Officials from the FAA were meeting with Pratt & Whitney and Boeing representatives on Sunday evening, he added.

Fresh blow for Boeing

Flight UA328 had been headed from Denver to Honolulu when it experienced an engine failure shortly after departure.

Residents in the Denver suburb of Broomfield found large pieces of the plane scattered around their community.

No one onboard or on the ground was injured.

But the engine failure marks a fresh blow for Boeing after several high-profile aviation accidents.

The manufacturer’s 737 MAX was grounded worldwide in March 2019 after 346 people died in two crashes — the 2019 Lion Air disaster in Indonesia and an Ethiopian Airlines crash the following year.

Investigators said a main cause of both crashes was a faulty flight handling system known as the Maneuvering Characteristics Augmentation System, or MCAS.

Boeing was forced to revamp the system and implement new pilot training protocols.

The 737 MAX was a big hit with airlines, becoming Boeing’s fastest-selling aircraft until its grounding, which has now been lifted.

After the Covid-19 crisis decimated demand, airlines canceled hundreds of orders for the plane.

Boeing To Cut 7,000 More Jobs As It Reports Another Loss

In this file photo the Boeing Company logo is seen on a building in Annapolis Junction, Maryland, on March 11, 2019. Jim WATSON / AFP

 

Pressured by another quarterly loss, Boeing announced Wednesday additional job cuts as it adapts to a prolonged downturn in the aviation industry.

The planemaker, which has been in belt-tightening mode throughout 2020, plans to eliminate about 7,000 more jobs through the end of 2021. The headcount at that time will be around 130,000, down from 160,000 in January of this year.

Boeing reported a third-quarter loss of $449 million, compared with profits of $1.2 billion in the year-ago period.

Revenues fell 29.2 percent to $14.1 billion.

A sharp drop in commercial plane travel has prompted airlines to cancel plane orders or defer deliveries, crimping Boeing’s revenues.

On top of that, the company’s finances have been under pressure due to the grounding since March 2019 of the Boeing 737 MAX, which is nearing regulatory approval to resume service after a lengthy oversight process with air travel authorities.

“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” said Chief Executive Dave Calhoun.

Boeing did not announce additional reductions in commercial plane production.

Shares in Boeing rose 0.3 percent to $155.65 in pre-market trading.

AFP

Boeing Reports Annual Loss Of $636m, First In More Than Two Decades

Boeing employees and guests take photos and welcome a Boeing 777X airplane returning from its inaugural flight at Boeing Field in Seattle, Washington on January 25, 2020. PHOTO: JASON REDMOND / AFP

 

Boeing reported its first annual loss in more than two decades on Wednesday as the lengthy grounding of the 737 MAX undercut the company’s revenues and exploded costs.

The aerospace giant reported a $1.0 billion loss in the fourth quarter and a loss of $636 million for all of 2019, the company’s first year in the red since 1997.

Newly-installed Chief Executive David Calhoun, who took the reins this month to stabilize the situation, pledged to turn the company around even as Boeing disclosed $9.2 billion in new costs connected to the MAX.

Some analysts had expected new costs twice as high, and despite the hefty charges, Boeing shares rallied early Wednesday in pre-market.

The MAX has been grounded since March following two crashes that killed 346 people which opened the doors to intense scrutiny of Boeing’s safety practices — and regulatory oversight of its productions — as well bruising congressional investigations which have revealed a troublesome culture at the aviation giant.

“We are committed to transparency and excellence in everything we do,” Calhoun said in a statement. “Safety will underwrite every decision, every action and every step we take as we move forward.”

Calhoun has been at the helm of Boeing only since January 13 after Dennis Muilenburg was ousted in December following criticism of his handling of the crisis, and immediately after damning series of internal communications were released.

Calhoun is targeting mid-2020 to win approval from aviation regulators to resume flights on the MAX, which is seen as a more realistic timeframe after Muilenburg repeatedly pushed a more optimistic schedule.

Higher cost

The grounding of the MAX dented Boeing’s earnings in multiple ways, halting deliveries of new planes to customers, a major source of revenues.

Boeing revenues in the fourth quarter plunged 36.8 percent to $17.9 billion, while revenues for all of 2019 dropped 24.3 percent to $76.6 billion.

The crisis also prompted the manufacturer to first reduce and then halt production of the MAX until the crisis is resolved.

Boeing said Wednesday the changes in the production schedule added $2.6 billion in costs connected to airplane deliveries, plus another $4 billion in “abnormal production costs” primarily in 2020 associated with the suspension of the MAX and a “gradual resumption” of production.

The company set aside $2.6 billion to compensate airlines that have been forced to cancel thousands of flights due to grounded MAX planes and undelivered aircraft.

The MAX crisis also has weighed on numerous suppliers, such as Spirit AeroSystems, which announced earlier this month that it would lay off 2,800 employees in Kansas due to the production stoppage.

And General Electric, which builds engines for the MAX, said the crisis lowered cash flow by $1.4 billion for 2019.

Boeing also announced Wednesday that it would again cut back production of the 787 Dreamliner, a top-selling plane that has supported revenues during the protracted 737 MAX grounding.

The aerospace giant plans to cut production to 10 airplanes a month in early 2021 through 2023 based on the “near-term market outlook,” Boeing said.

The company in October had dropped to 12 a month from 14 due to lower orders from China.

Boeing shares rose 2.4 percent to $324.25 in pre-market trading.

AFP

Trump Calls Boeing A ‘Big Disappointment’

A file photo of US President, Donald Trump. AFP Photo.

 

President Donald Trump on Wednesday criticised Boeing as a “very disappointing company” because of the aerospace giant’s recent problems after the grounding of the 737 MAX plane, which he said had a knock-on effect for the US economy.

“This is one of the great companies of the world, let’s say as of a year ago, and then all of a sudden things happen,” Trump said in an interview on CNBC from the Davos economic forum in Switzerland.

This “had a tremendous impact. You know, when you talk about growth, it’s so big that some people say it’s more than a half a point of GDP. So Boeing — big, big disappointment to me,” he said.

Boeing had Tuesday officially pushed back the time frame for the 737 MAX to return to the skies, sending shares plunging and overshadowing an earlier announcement of a first flight of the delayed 777X plane.

The 737 MAX was grounded worldwide on March 13, 2019, after two crashes claimed the lives of 346 people.

US Treasury Secretary Steven Mnuchin said on Tuesday he believed that issues including the grounding of Boeing 737 MAX plane had shaved some 0.5 to 0.7 of a percentage point off the US growth rate.

AFP

737 MAX: After 10 Months Of Crisis For Boeing, Questions Remain

 

 

Boeing is still far from seeing an end to its continuing crisis over the 737 MAX airplane. Ten months after two fatal crashes led to the grounding of the aerospace giant’s star passenger jet, many serious questions remain, including the date of its return to service.

David Calhoun, 62, a former top executive at General Electric, is to take charge of the aircraft manufacturer on Monday, after CEO Dennis Muilenburg was ousted in late December over what critics said was his catastrophic handling of the crisis.

– What exactly happened? –
On March 10, 2019, an Ethiopian Airlines 737 MAX crashed southeast of Addis Ababa just minutes after takeoff, killing all 157 on board.

It was the second accident in five months for the model, which Boeing launched in May 2017 as a competitor for Airbus’s A320neo in the lucrative narrow-body aircraft segment.

The October 2018 crash in Indonesia of a Lion Air 737 MAX had claimed 189 lives.

On March 13 of last year, the United States and Canada became the last two countries to ground MAX planes. Thus began Boeing’s crisis.

When will the MAX fly again?

It’s hard to say. The most optimistic prediction is late February or early March, but some experts, including the respected Richard Aboulafia of the Virginia-based Teal group, speak of late April or early May.

United Airlines has ruled out flying the MAX before June.

Investigations by Indonesian and Ethiopian authorities raised questions about the plane’s automated flight control system known as MCAS (Maneuvering Characteristics Augmentation System).

The US Federal Aviation Administration (FAA) has ordered Boeing to provide a fix, which the company is working on.

But as a result of the crisis FAA has subjected the MAX, which was only partially inspected during its original flight certification, to microscopic scrutiny.

The agency at first detected a problem with the microprocessor that manages flight systems and then, more recently, a flaw in the electrical wiring.

Once Boeing has resolved all problems, the FAA should set a date for a test flight — the last major hurdle before the MAX is green-lighted to return to service.

Boeing has taken one major step in that direction: after long resisting having MAX pilots train on flight simulators rather than on computers — a longer and more costly option, but one demanded by European and Canadian regulators — Boeing has finally backed that course.

– Is Boeing still building and delivering the MAX? –
Boeing suspended MAX deliveries a few days after the planes were grounded. It had continued to produce the aircraft, but has built none since January 1.

From mid-March to the end of December, Boeing produced 400 MAX planes, bringing the total number built to 787. Of those, 387 were in service when orders to ground them went out.

The planes are parked at different Boeing sites in the US.

Is Boeing in financial trouble?

No. As of the end of September, the company had $10 billion in hand and about $20 billion in available funds, according to financial documents.

Besides passenger planes, Boeing builds military aircraft and equipment. It also has a space division.

Nevertheless, the costs linked to the MAX crisis have continued to mount. They had already reached $9.2 billion by the end of September and should soar as Boeing deals with demands for damages and compensation from airline companies, aircraft-leasing firms, parts suppliers and victims’ families.

To cover future expenses, the company expects to turn to the financial markets to borrow up to $5 billion, according to the Wall Street Journal.

– What about Boeing employees?? –
The company so far has ruled out any firings or layoffs, which could provoke a political outcry in this US election year.

Boeing has already shifted thousands of workers to other programs — building its 767, 787 and 777/777X models — and has promised to find jobs for others.

– How are suppliers affected? –
The consequences vary. Engine builders like General Electric and Safran Aircraft Engines, through their CFM joint venture, are partially spared since they also build engines for Airbus.

Along with other smaller American suppliers, they will profit from Airbus’s surprise decision to ramp up production of the A320 in the southern US city of Mobile, Alabama.

But the Spirit AeroSystems group, which provides fuselages and other parts for the MAX, has been hard hit; the 737 program represents more than half its turnover. The company plans to cut 16 percent of its workforce — around 2,800 employees — and has not ruled out further cuts.

– Is Airbus profiting as Boeing struggles? –
Airbus received orders for 768 planes in 2019 and delivered 863. Boeing, which has yet to publish its full-year figures, had delivered 345 as of the end of November, while 84 orders were lost.

Airbus also gained ground in the important middle of the market sector with its launch of the A321XLR, which will give air carriers the ability to open new long-haul routes between secondary cities using a narrow-body craft that is less expensive, easier to fill and thus more profitable.

The first orders are already pouring in, notably from United Airlines, which ordered 50 of the new aircraft in December.

Boeing is banking on its own NMA (New Midsize Airplane), built to carry from 220 to 270 passengers on routes up to 5,400 miles (8,700 kilometers). But progress has been slow, and it is unclear, given the severe challenges over the MAX program, whether the NMA will be rolled out this year as planned. (Boeing has not decided to launch the NMA yet. It promised to make a decision this year.)

Key Dates In The Boeing 737 MAX Crisis

A Boeing 737 MAX 9 airplane test its engines outside of the company’s factory on March 11, 2019, in Renton, Washington. AFP

 

 

From its first flight to ceasing production and ouster of the CEO on Monday, below are the key dates in the life of the Boeing 737 MAX and the twin crashes that sparked a crisis.

Two deadly disasters

The Boeing 737 MAX, a narrow body aircraft that can transport up to 230 passengers depending on the model (7, 8, 9 and 10), was certified to fly on March 8, 2017 by the US Federal Aviation Agency (FAA). It was put into service in May of that year.

On October 29, 2018, a 737 MAX 8 from budget airline Lion Air crashed off the coast of Indonesia, killing 189 passengers and crew members.

Less than five months later, on March 10, 2019, an Ethiopian Airlines 737 MAX 8, flying to Nairobi, crashed near Addis Ababa, claiming 157 lives.

Grounded worldwide

China is the first country to ban the aircraft, on March 11. Regulators worldwide follow suit, but the American officials initially said there was “no basis” for grounding the 737 MAX.

US President Donald Trump intervened on March 13 announcing the planes would be grounded “effective immediately.” The FAA issued the official decree shortly after his statement.

– Crash investigations –
Indonesian authorities published its preliminary report on the Lion Air crash on November 28, 2018 — months before the second disaster — citing nine factors that contributed to the accident, including inadequate pilot training, and flawed design and certification of the MCAS flight control software.

The MCAS, which lowers the aircraft’s nose if it detects a stall or loss of airspeed, was developed specifically for the 737 MAX, which has heavier engines than its predecessor in the 737 family. But it relied on a single sensor which made it vulnerable to failure.

On March 17, 2019, Ethiopian Transportation Minister Dagmawit Moges revealed “clear similarities” between the Ethiopian Airlines flight 302 and Lion Air flight 610.

The MCAS anti-stall system was activated automatically in both disasters after receiving erroneous information indicating that the aircraft was stalling. The pilots were not aware of the existence of this software since it was not in the flight manuals.

Boeing comes under scrutiny of American and international regulators, as well as the US Congress, which is investigating complaints from American pilots about the MCAS, and the close ties between the FAA and the company.

Production stopped

After the aircraft is grounded, Boeing is forced to suspend deliveries on March 14, 2019, but the company initially maintains MAX production at 52 planes a month.

Output is later cut to 42 a month for the popular plane, which represented nearly 40 percent of Boeing sales in 2018.

But on December 17, after the FAA made it clear the MAX would not return to the skies anytime soon, Boeing announces it will halt production of its flagship aircraft in January 2020, for an indefinite period.

Leadership shakeup

The company had continued to express confidence that the MAX would return to the skies by the end of 2019, as it addressed software modifications and improved pilot training, but was criticized for putting pressure on regulators to rush the plane back into service.

Airlines were forced to push back the expected date for returning their Boeing 737 MAX fleet to service.

A week after announcing the production halt, Boeing on December 23 ousted Dennis Muilenburg, who has been at the helm of Boeing since July 2015. The company already stripped him of his title of chairman of the board in October.

Boeing named board Chairman David Calhoun as chief executive and president, saying the company needed to “restore confidence” and “repair relationships with regulators, customers and all other stakeholders.”

Boeing To Halt Production Of Grounded 737 Max In January

(FILES) In this file photo taken on March 27, 2019 Employees work on Boeing 737 MAX airplanes at the Boeing Renton Factory in Renton, Washington. 
Jason Redmond / AFP

 

Boeing said Monday it would temporarily suspend production of its globally grounded 737 MAX jets next month as safety regulators delay the aircraft’s return to the skies after two crashes.

The decision confirmed investor fears that the company’s recovery from the crisis is dragging on longer and creating more uncertainty for Boeing than executives anticipated.

Boeing’s travails since March have weighed on the US economy, holding down American manufacturing output, trade, and sales of durable goods while damaging the company’s performance on Wall Street’s benchmark Dow Jones Industrial Average.

In a statement, the company said it would continue to pay its workers despite the temporary production stoppage, but the decision immediately raised questions for the future of parts suppliers that contribute to the jets’ manufacture.

“We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected,” the company said in a statement.

READ ALSO: Boris Johnson Plans Law Blocking Brexit Delay Beyond 2020

“As a result of this ongoing evaluation, we have decided to prioritize the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month.”

The company said it would focus on delivering 400 jets it has kept in storage.

Though the jets have been grounded worldwide since March following deadly crashes in Indonesia and Ethiopia, which left 346 people dead, Boeing had continued to produce 40 of the planes per month at a Renton, Washington facility.

Shares Tumble On Wall Street

Last week, US aviation regulators issued the company an unusually sharp rebuke, accusing it of pursuing an “unrealistic” timeline for the MAX’s return to service and of making public statements intended to put pressure on federal authorities.

The Federal Aviation Administration said Wednesday it could not approve the jets’ return to service before 2020, even though Boeing had long said it planned to get officials’ green light before the end of this year.

Boeing and the FAA have been under intense scrutiny for their responses to issues with the aircraft, including the flight-handling system involved in both accidents, the Maneuvering Characteristics Augmentation System, or MCAS.

“Boeing seems to have finally come to terms with the new reality that international safety regulators will not be bent to their whim, and the process of returning these planes to service is not as simple as a quick software fix,” Senator Richard Blumenthal said in a statement.

Analysts say Boeing’s prospects will remain clouded until Boeing can get the all-clear for the MAX to fly again.

“As we have throughout the 737 MAX grounding, we will keep our customers, employees and supply chain top of mind as we continue to assess appropriate actions,” the company said, adding that it will disclose financial information tied to the suspension when it releases quarterly results late next month.

Major air carriers that had purchased 737 MAX jets have repeatedly pushed back the dates on which they anticipate a return to service.

Southwest said Thursday it had reached a confidential agreement with Boeing partially compensating the airline for costs related to the grounding of the jets.

Nevertheless, the manufacturer in November unveiled an updated version of the jet, the 737 MAX 10.

Shares in Boeing fall 4.3 percent as investors anticipated Monday’s decision. They were down another 0.4 percent in after-hours trading at 2300 GMT.

AFP

Boeing Says Working With Regulators For Return Of 737 MAX

Boeing 737 airplanes are pictured on the tarmac at the Boeing Renton Factory in Renton, Washington on March 12, 2019./ AFP

 

Boeing said on Saturday that it was working closely with regulators to make the necessary changes to grounded 737 MAX aircraft to ensure their safe return.

The model has been grounded since March following the second of two crashes which left a combined total of 346 people dead.

“We are interacting daily with the FAA (Federal Aviation Administration)… and also with regulators around the globe” over the return of the 737 MAX, CEO of Boeing Commercial Airplanes Stan Deal told a press conference in Dubai.

“We continue to work diligently around the changes necessary for the airplane,” Deal said ahead of the Dubai Airshow, an event that opens on Sunday.

“We continue to make progress.”

The FAA, which has been widely criticised for entrusting certification of important systems of the aircraft to Boeing, has promised a thorough review before recertification.

On Tuesday, the FAA said it expected the airplane to resume flying in January, delaying its return by one month.

But on Friday, United Airlines said it had pushed back its expected date for 737 MAX aircraft to return to service, following similar announcements by rivals Southwest and American Airlines.

The US air carrier now says it expects flights to resume on March 4, 2020, two months later than previously estimated.

Boeing said this week it hoped to get regulatory approval for a return to service before the end of this year but has delayed its estimate for the resumption of commercial flights until January, to allow for pilot training.

Deal said approvals from the FAA and other regulators around the world will help set the schedule for the air-plane’s return.

He said Boeing is discussing compensation for the grounding with its customers, including low-cost flydubai, a key client for the 737 MAX.

The grounding has exceeded initial expectations as Boeing had to upgrade systems and faced questions from regulators and politicians over the plane.

The 737 MAX crisis is one of the most serious in Boeing’s 103-year history, and has already cost the company tens of billions of dollars, amid multiple investigations by US authorities and complaints from victims’ families.

Boeing Chairman Says CEO Muilenburg Did ‘Everything Right’

Employees work in the cargo hold of a Boeing 727 MAX 9 test plane outside the company’s factory, on March 14, 2019 in Renton, Washington.
STEPHEN BRASHEAR / GETTY IMAGES NORTH AMERICA / AFP

 

Boeing’s new chairman on Tuesday gave a forceful vote of confidence in CEO Dennis Muilenburg amid calls in Congress for the embattled Boeing chief executive to resign after two deadly crashes.

“Dennis has done everything right,” Boeing Chairman David Calhoun told CNBC, praising Muilenburg for keeping the board closely abreast of efforts to return the 737 MAX back to service after 346 people were killed in the accidents.

“To date he has our confidence,” Calhoun said.

Shares rose after the interview in which Calhoun also confirmed that the company still expects the MAX to receive regulatory approval this year to return to service.

Calhoun acknowledged that some of Boeing’s assumptions in the development of the MAX were faulty but hit back at suggestions that the company cut corners and compromised safety.

Boeing’s board has kept a low profile during the crisis over the MAX, which was grounded worldwide in March following the second of the two crashes.

The company on October 11 stripped Muilenburg of the chairman title — replacing him with Calhoun — even as he was kept on as CEO and as a member of the board.

Muilenburg last week endured two days of bruising grilling and criticism from lawmakers probing the issues that led to the two accidents involving the top-selling jet.

Boeing has acknowledged problems with the Maneuvering Characteristics Augmentation System, an automated flight control system implicated in both the Lion Air crash of October and Ethiopian Airlines crash in March.

Calhoun said the crashes also revealed “flawed” assumptions about how pilots would react to a malfunction of the system.

“No one was hiding anything. It was a set of engineering decisions that ended up being wrong,” Calhoun said.

“And our job now is to make sure that whatever processes we had, whatever process our regulator has, that those processes never allow for this to ever happen again.”

But lawmakers depicted the crashes as evidence Boeing had cut corners on safety to rush the MAX into service to compete with a plane from rival Airbus.

Cultural Problem?

US Representative Peter DeFazio, an Oregon Democrat who chaired last week’s hearing before the House Transportation Committee, pointed to documents he said showed that during the MAX’s development, Boeing leadership was “aware of many of the problems that engineers are now attempting to fix.”

DeFazio faulted Muilenburg’s responses to many questions as “consistent with a culture of concealment and opaqueness.”

“The bottom line is that there are a lot of unanswered questions and our investigation has a long way to go to get the answers everyone deserves, especially the families of the crash victims,” DeFazio said in a letter to congressional colleagues.

But Calhoun said criticism of Boeing’s corporate culture missed the mark.

While Boeing could take steps to strengthen the visibility of its commitment to safety, “I do not believe that this instance is indicative of a cultural problem,” he said.

Meanwhile, he said Muilenburg is completely focused on returning the MAX to service and succeeding in the face of “one of the most difficult situations any CEO that I’ve ever known has lived through.”

“We’re going to support Dennis.”

Calhoun said Muilenburg had asked not to receive a bonus for 2019 after lawmakers lambasted the CEO over his pay at the hearing last week.

In 2018, Muilenburg’s total compensation package was $23.4 million, according to a securities filing.

And Calhoun said the company was not considering clawing back Muilenburg’s pay from earlier years because there was “no culpability.”

Shares of Boeing rose 2.1 per cent to $358.29.

US Lawmakers Grill Boeing CEO After MAX Crashes

Dennis Muilenburg (R), president and CEO of the Boeing Company testify before the Senate Commerce, Science and Transportation Committee October 29, 2019 on Capitol Hill in Washington, DC.  Alex Wong/Getty Images/AFP

 

Boeing chief executive Dennis Muilenburg faced a barrage of criticism from US lawmakers Tuesday at a jammed hearing on the company’s commitment to safety as family members of victims of two deadly MAX 737 crashes looked on.

In his first appearance before Congress since the 737 MAX was grounded in March, Muilenburg apologized for the crashes and acknowledged shortcomings, but broadly defended Boeing’s development of the ill-fated aircraft.

Senators from both parties signaled clear dissatisfaction, bordering on rage in some cases.

“Boeing is the company that built the flying fortress that saved Europe,” said Democratic Senator Tammy Duckworth, a former National Guard helicopter pilot who lost both legs during the Iraq War.

“You have told this committee and you told me half-truths over and over again,” said Duckworth, who represents Illinois, home to Boeing’s corporate headquarters. “You have not told us the whole truth and these families are suffering because of it.”

Muilenburg stuck to the company’s longstanding stance that development of the MAX followed time-tested company procedures and defended it against charges that it cut corners on safety and was too cozy with regulators the Federal Aviation Administration.

Many analysts view the hearings as a can’t-win situation for Muilenburg and expect him to exit the company in the foreseeable future, most likely after the MAX returns to service.

Asked by a reporter if he would resign, Muilenburg said, “That’s not where my focus is. My focus is on the job at hand focused on safety. And we’re going to do everything we can to ensure safe flight.”

But Nadia Milleron, who lost her daughter on the Ethiopian Airlines crash, said the company needs a shakeup.

Muilenburg “needs to resign. The whole board needs to resign,” she said. “I expect him to stop putting the blame on the FAA and other people because that is what they always do. They don’t take responsibility.”

Passing the buck? 

Many of the questions focused on the Maneuvering Characteristics Augmentation System, an automated system that Lion Air and Ethiopian Airlines pilots were unable to control, resulting in crashes.

“We have learned from both accidents and we’ve identified changes that need to be made to MCAS,” Muilenburg told the Senate Commerce Committee.

But Senator Ted Cruz, a Texas Republican, lambasted Muilenburg as he struggled to answer pointed questions about 2016 texts from Boeing pilot Mark Forkner to a colleague that discussed the “egregious” performance of the MCAS during a simulation test and said that he “basically lied to the regulators.”

Muilenburg indicated that Boeing counsel shared the documents with the Justice Department in February, but that he did not see the specific exchange until it was reported by news media earlier this month.

“I was made aware of existence of this kind of document,” Muilenburg told Cruz. “I counted on counsel to handle this appropriately.”

“That is passive voice,” Cruz shot back. “You’re the CEO, the buck stops with you.

“How did your team not put it in front of you, run with their hair on fire and say ‘We have a real problem here?’ How did that not happen and what does that say about the culture at Boeing?”

Senator Maria Cantwell, a Democrat from Washington state where the 737 MAX is built, said the crisis showed that Boeing leadership was failing its employees.

“This isn’t a question about line workers — this is a question about the corporate view from Chicago, and whether there is enough attention to manufacturing and certification,” Cantwell said. “You should take offense to the fact that people say, ‘It’s a great company that’s not being run correctly.'”

Tuesday’s hearing will be followed by a second session on Wednesday in the House Transportation Committee.

Boeing is still targeting regulatory approval for the MAX in 2019, a timeframe that many aviation experts still view as possible.

Senator Roger Wicker, a Mississippi Republican who chairs the Senate committee, told CNBC before the hearing that he intends to scrutinize Boeing’s processes but said he did not see anything that would prevent the MAX from going back into service “fairly soon.”

“I think this plane is eminently fixable,” Wicker told CNBC. “I don’t think it’s a hopeless cause.”

AFP