Headache as planes grounded
More than 40 countries keep their 737 Max 8s on the tarmac after Ethiopian Airlines’ deadly plane crash
WASHINGTON: Boeing’s newest version of its best-selling airliner was supposed to boost its fortunes for years to come.
Instead, it has turned into the company’s biggest headache, with more than 40 countries – including the US, which had been one of the last holdouts – grounding the 737 Max 8 after a second fatal crash proved one too many.
On Wednesday, the US Federal Aviation Administration issued an emergency order keeping the planes on the tarmac after refusing to do so in the days immediately after the crash of a Max 8 operated by Ethiopian Airlines that left 157 people dead.
The agency said what made the difference was new, enhanced satellite tracking data and physical evidence on the ground that linked the Ethiopian jet’s movements to those of an Indonesian Lion Air flight that plunged into the Java Sea in October and killed 189 people.
“That evidence aligns the Ethiopian flight closer to Lion Air, what we know happened to Lion Air,” said Daniel Elwell, acting FAA administrator.
Officials at Lion Air have said sensors on its plane produced erroneous information on its last four flights, triggering an automatic nose-down command that the pilots were unable to overcome on its final voyage.
Since debuting in 2017, Boeing has delivered more than 350 of the Max in several versions that vary by size. Dozens of airlines around the world have embraced the plane for its fuel efficiency and utility for short and medium-haul flights.
The groundings will have a far-reaching financial impact on Boeing, at least in the short-term, said John Cox, a veteran pilot and chief executive of Safety Operating Systems.
In addition to the planes that have been grounded, there are more than 4 600 Boeing 737 Max 8 planes on backlog that are not yet delivered.
“There are delivery dates that aren’t being met, there’s usage of the aircraft that’s not being met, and all the supply chain things that Boeing so carefully crafted,” Cox said.
Impacted airlines also may come knocking on Boeing’s door claiming damages. Norwegian Airlines said it would pursue reimbursement for lost business and if other carriers followed suit, that could be costly.
Whether airlines would be successful with such claims depends on the details of the contracts those carriers have with Boeing, said Dan Rose, partner at Kreindler & Kreindler, an aviation law firm. .
“One way or another, whether there’s a contractual provision that covers it or not, there are almost certainly going to be claims made against them,” Rose said.
In a research note earlier this week, Morgan Stanley called the grounding of the fleet a “worst-case scenario” that would disrupt near-term profitability because the 737 covers 70% of Boeing’s commercial production. The Max fleet was expected to make up most of the 737 deliveries this year and all deliveries over the next three years, according to data compiled by Morgan Stanley.
Shares in Chicago-based Boeing ended up $1.73 or about 0.5%, at $377.14 on Wednesday after they lost more than 11% in the first two days this week. The stock is still up 17% for the year.
Boeing issued a statement saying it supported the FAA’s decision even though it “continues to have full confidence” in the planes’ safety.
The company also said it had recommended the suspension of the Max fleet after consultations with the government.
The FAA was under intense pressure to ground the planes and resisted even after Canada relented on Wednesday and agreed to bar the Max from the air, leaving the US almost alone.
The agency, which prides itself on making data-driven decisions, had maintained there was nothing to show the Boeing jets were unsafe, and flights continued.
But President Donald Trump, who announced the grounding, was briefed that same day on new developments by Elwell and Transportation Secretary Elaine Chao, and they determined the planes should be grounded, the White House said. Trump spoke afterwards to Boeing chief executive Dennis Muilenberg and Boeing signed on.
“At the end of the day, it is a decision that has the full support of the secretary, the president and the FAA as an agency,” Elwell said.
While early satellite tracking data showed similarities between the Ethiopian jet’s flight path and Lion Air, Elwell said the FAA was sceptical of the low-resolution images. The data showed movements that weren’t consistent with how planes fly, Elwell said.
On Wednesday, global air traffic surveillance company Aireon, Boeing and the US National Transportation Safety Board were able to enhance the initial data and make it more precise “to create a description of the flight that made it similar enough to Lion Air”, Elwell said.
He wouldn’t detail the evidence found on the ground, saying the FAA is a party to the ongoing investigation.
The US also grounded a larger version of the plane, the Max 9.
The Ethiopian plane’s flight data and voice recorders were to be sent to France on Wednesday night for analysis, Elwell said. Some aviation experts have warned that finding answers could take months.
Airlines, mainly Southwest, American and United, should be able to swap out planes pretty quickly, and passengers shouldn’t be terribly inconvenienced, said Paul Hudson, president of flyersrights.org, which represents passengers. The Max, he said, makes up only a small percentage of the US passenger jet fleet, he said.
In making the decision to ground the Max 8s in Canada, Transport Minister Marc Garneau said a comparison of vertical fluctuations found a “similar profile” between the Ethiopian Airlines crash and the Lion Air crash. Garneau, a former astronaut who flew in the space shuttle, emphasised that the data is not conclusive but crossed a threshold that prompted Canada to bar the Max 8.
The growing number of countries joining the ban put the FAA in a difficult position, said Peter Goelz, a former managing director of the NTSB who is now an aviation consultant. He said the FAA certified the 737 Max as airworthy and has been the lead regulatory body for the airplane.
Ethiopian Airlines chief Tewolde Gebremariam said its pilots had received special training on how to deal with the Max’s anti-stall software that could point the nose down.
“In addition to the basic trainings given for 737 aircraft types, an additional training was given for the Max version,” Tewolde told state news reporters. “After the Lion Air crash, questions were raised, so Boeing sent further instructions that it said pilots should know.”
Tewolde said he is confident the “investigation will reveal the crash is not related to Ethiopian Airlines’ safety record.” | AP