Boeing 737 Max Ungrounding Pushed Back Again; WSJ Sources Say Early 2021

One of the perverse features of the Covid-19 airline industry wrecking ball is that it makes the colossal mismanagement of the Boeing 737 Max less consequential. According to the Seattle Times, orders for 800 planes have been cancelled or designated as doubtful since the start of 2020.

Nevertheless, it’s still not a good look that the 737 Max out of the regulatory doghouse date keeps being pushed back. We’d speculated that it would take most of 2020 if not longer before the plane was allowed to fly again, given the nature of the problems with the software and critically, the related hardware. Supposedly knowledgeable parties pooh-poohed that idea.

And despite having been slapped down by the FAA for trying to pressure the agency with overly optimistic messaging, Boeing again has been forecasting approval dates that the FAA is rejecting. Boeing’s most recent “good to go” estimate was mid-September. That’s now being officially pushed back both due to additional FAA review plus a 45 day public comment period. Again, in a sign of Boeing hubris, the aircraft maker had pushed for the comment period taking place after the FAA had green-lighted the plane. Not only does that obviously render the comment process moot, but not surprisingly, that’s not how the agency normally does things.

Having said all that, there’s an interesting disconnect in the press accounts of Boeing’s latest embarrassment. The Seattle Times and the Wall Street Journal disagree on when the FAA is likely to allow the 737 Max to fly. The Seattle Times says the plane is not likely to be deemed airworthy before mid-October, and admittedly does not give any other time estimate. The Journal, citing “government and industry officials” says the plane is not likely to be carrying passengers before early 2021. The Seattle Times account was published first but the Wall Street Journal labels its story an exclusive, as in it is depicting its later report as more authoritative.

Frankly, I find the Journal’s estimate more realistic simply based on a summary of what has to happen…which is set forth in the Seattle Times. One important novel feature is the need for foreign regulator signoff. Recall that before the FAA lost credibility by being the last major regulator to ground the 737 Max, its certifications were accepted without question by other national regulators.

Now other major authorities, particularly the EU’s, China’s and Canada’s regulator have all said they want to make additional reviews. The FAA could approve the 737 Max for passenger flight without waiting for the other regulators to sign off, and what happens may be less consequential given the severely depressed state of air travel. But if the FAA issues a go-ahead much in advance of other regulators, it runs the risk of alienating gun-shy consumers. Recall that Delta didn’t buy any 737 Max planes, so there’s no risk of last-minute 737 Max substitution for Delta passengers.

As you can see from the Seattle Times, there are still a lot of moving parts in the approval process:

The FAA said Tuesday it will soon formally publish the proposed design changes to the Boeing 737 MAX flight control system as well as proposed new pilot procedures, and will allow 45 days for public comment ahead of clearing the jet to fly passengers again….

After the public comment period closes, the FAA will take some weeks to review the comments and respond to them in a public posting in the Federal Register.

The remaining steps then include a report issued by both the FAA and a panel of international regulators — the Joint Operations Evaluation Board (JOEB) — on proposed new training procedures for 737 MAX flight crews. That will also be posted for public comment.

In addition, the 737 MAX Technical Advisory Board (TAB) — consisting of experts from nine civil aviation authorities worldwide as well as the National Aeronautics and Space Administration (NASA) and the FAA — must review Boeing’s final submission of documents on the MAX design changes to evaluate compliance with all FAA regulations.

Only then will the FAA be able to issue an Airworthiness Directive, which will lay out for airlines exactly what design changes must be installed on each airplane before it may re-enter commercial service.

This directive would finally be Boeing’s long-awaited clearance to reenter service.

With that, U.S. airlines could start taking their parked MAX planes out of mothballs and start training their pilots on the new procedures. Scheduled domestic passenger flights on the MAX could follow some 30 to 60 days later.

As I read this, at best, the 737 Max TAB review could happen in parallel with the other reviews. However, it would seem unrigorous to proceed before at least the domestic comment period was completed, particularly since unions or whistleblowers could raise important challenges. Recall that the Southwest pilots union has taken the unusual step of suing Boeing.

So back of the envelope….two weeks for the FAA to post the proposed changes. 45 days for the comment period. At least two weeks to write up the report on the comments. That’s already early-mid October. If you assume the reviews that include foreign regulators come after that, that’s at least two more months, assuming a 30 day comment period and two weeks on either end (to frame and announce the comment period and to review results and publish a report). So that takes us to mid-December, which means nothing will get going till the holiday period is over.

In other words, I don’t see how anyone can be fantasizing that the 737 Max will be carrying passengers before February 2021, and the odds favor later than that.

So no wonder the Journal is taking a more sober view:

Boeing Co.’s 737 MAX isn’t likely to resume widespread passenger flights until early next year—nearly two months beyond previous expectations—due to another regulatory delay, according to U.S. government and industry officials.

That means the jets are expected to be grounded at least as long under the plane maker’s chief executive, David Calhoun, as under his predecessor, Dennis Muilenburg, who was ousted at the end of 2019 following repeated delays in getting the plane back into service.

The latest timeline, these officials said, anticipates the Federal Aviation Administration won’t finish work to lift its March 2019 grounding order until late October or early November, because the agency has decided to ask for public comments before finalizing software and hardware changes. Regulators overseas could take days or weeks longer to concur in those decisions.

The Journal appears to have missed that foreign regulators are also planning a public comment period. Or perhaps they assume it’s going to take place in parallel with the US public comments. But that’s politically risky and with the airplane biz in hibernation anyhow, what’s the rush? Plus Europe is on holiday in August, another impediment to moving forward with alacrity.

Benzinga nevertheless reported a wave of large option bets, largely bullish, after the FAA announcement. I’d like to know what they are smoking, although in fairness, Boeing keeps blowing a lot of smoke and Boeing is also highly motivated to do everything it can to prop up its stock price. Or maybe these are some remaining Robinhood punters who have not yet blown themselves up.

We’ll see who has the better guesstimate in due course. In the meantime, the Seattle Times reported that industry analyst Ken Herbert of Canaccord Genuity forecast that Boeing would make only 40 737 Max deliveries, assuming the old mid-September FAA greenlight. It’s hard to make an upbeat case if Boeing can’t yet expect buyers to pay for planes.

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  1. PlutoniumKun

    Its very hard to see how Boeing can crawl out of this hole. We were told this time last year they were in trouble if they couldn’t get it certified before November 2019. And here we still are.

    Lambert had a very interest link yesterday on the 787 – you would expect post Covid that the 787 would be the one potential jewel they still have, as it would be ideal for replacing many high capacity hub and spoke based routes with medium capacity direct routes. But it looks like its suffering from multiple cancellations, especially from China. For what little lunch is available for the big two, the A350 is eating up the 787’s. Maybe the industry has already decided that Boeing is toast.

    It will also bring those airlines that bet big on the MAX down. Ryanair, Europes biggest budget airline, is a Boeing only operator, they have nothing but 737’s. They doubled down, no doubt hoping they could push Boeing to give them a big discount on a big purchase. Looks like a gamble that will go horribly wrong for them. Couldn’t happen to a nicer bunch of folks.

    Airlines are already doing sale and leasebacks to the major leasing companies (Easyjet for one). its very hard to see any logic in major airlines doing high cost purchasing deals with Boeing, when over the next few years the leasing companies will have lots of stock on hand and will be offering good deals. For that matter, the leasing industry must be very worried about having too many 737’s on their books as discount airlines crash.

    1. Noah Way

      Boeing is a big military contractor and there for “vital” to the national interest. They will to be allowed to fail.

      Corporate welfare queens rule!

  2. AEL

    Assuming that formal final approval happens after Brexit Transition End on Jan 1, will the UK’s CAA have to certify the MAX in the UK? Unless they are already working on it, it seems like a lot of work to do in a few weeks. And simply accepting what the EU regulator has determined seems so .. anti-brexit.

    1. campbeln

      FAA rubber stamp approval would be my (uneducated) guess.

      The real issues will come when the MAX crashes again; when (how soon after re-cert) and how (due to known, unknown or there-to-for ignored issues). If Boeing makes it that far, that will be the real crucible for them. The fact that they seem to be playing fast and loose with re-cert, knowing this real threat… concerns me more than anything else (finalization to the extreme?).

    2. d

      also depends they can do it at all….the eu has being doing that fir the how long now?????

  3. The Rev Kev

    Boeing plane options seem to be closing down. Airlines around the world are dumping the venerable Boeing 747 and in fact Australia’s last 747 flew out of the country today. You would think that with the troubles that Boeing is having with the 737 MAX, that they would go all in on the 787 but as PK has pointed out, that option is headed south. And with the bun fight between China and Trump, China would see no need to bail out Boeing on Trump’s behalf by ordering a big stack of those planes. I am betting that with all the revelations on how crapified Boeing’s production lines have become, that a lot of airlines are taking a second look at Boeing. Even NASA is dumping Boeing as a supplier. The lesson is that building quality planes still count. Who knew?

  4. Alex Cox

    From what I’ve read about the 737 MAX, mainly at NC and the Seattle Times, the problem simply isn’t fixable. The engines are too large, and too far forward, for the design of the plane. The MAX was an attempt to slap new motors on an old body and it didn’t work. This isn’t something that can be fixed with software (though there are software problems too).

    Looking forward to the public comment period!

    1. Darius

      It has been argued in comments on this site that the MAX is flyable despite the radically different engines, and that the issue was that the MCAS software was required to give the MAX the same flying characteristics as the most recent previous 737 update, the 737-NG. This was necessary for the MAX to retain the same type-rating as the NG and all previous 737 versions going back to the 1960s, and also to avoid having to retrain pilots to fly the new plane.

      Boeing sold the MAX to the airlines saying they wouldn’t have to spend money and pilot hours on retraining, and that it could be seamlessly integrated into their current 737 fleets. In addition, if the MAX lost the 737 common-type rating, the FAA would have to put it through the same rigorous certification process that a completely new “clean sheet” design undergoes. This is expensive and takes years. If Boeing had wanted that, it would have been planning for the last two decades on a new model to succeed the 737.

      Extrapolating from this argument, the problem isn’t the hardware modifications–and those engines look huge, ungainly, and awkwardly-placed for such a low-slung airplane. Rather, it was that the MCAS solution was poorly designed and executed, and all that has to be done is fix MCAS.

      However, it also has been discussed here and elsewhere that MCAS development was restricted by the severely limited computing power onboard the 737. The 737 electronics was state of the art in the 1960s, but is woefully limited by modern standards. It is similar to how the laptop on which I am writing this has much greater computing power than the Apollo 11 spacecraft. Substituting a modern chip with currently available computing power to accommodate MCAS fully, apparently, would cause the need to modify other systems, which, in turn, would require other modifications, creating runaway modifications that also would void the common-type rating, and trigger a full certification.

      In this environment, MCAS wasn’t implemented to fix a hardware problem, per se, but rather to retain the common-type rating. This indicates that Congress and the FAA should reexamine common-type rating. There is a problem when Boeing is selling thousands of planes to carry millions of passengers that is based on a design originally certified in the mid-1960s, and allowed periodic supposedly-minor design updates since then. As I understand it, the common-type rating imperative discourages otherwise obvious implementation of the latest technology and encourages manufacturers to try to layer new technology unsatisfactorily on top of outdated old technology.

      1. ex-PFC Chuck

        It has been asserted that an analogous situation was a factor in the Three Mile Island nuclear power accident in 1979. For obvious reasons, certification requirements for the use of technologies and design approaches in nuclear power plants were and continue to be arduously thorough. For this reason during the 1960s and 1970s, while most process industries were making the transition from electronic and pneumatic analog technologies into the digital computer age, nuclear power remained firmly in the former. During this same period, however, the size of nuclear generating installations was scalimg up from the 60 MW of the first commercial one in Shippingport, PA, into the high triple digits. TMI 2’s output rating was 906 MW. As unit size increased, so also did the number of valves, switches, etc. that had to be monitored and controlled, and the number of process values, such as pressures, and temperatures, of which operators and maintenance personnel needed to be aware. Some of these latter also had to be permanently recorded for regulatory, warranty, and/or general historical purposes. This was typically done with strip chart recorders that continuously traced the current the value of the variable on a slowly moving roll of paper. In the analog age each one of these status and variable “points” required space on the panel in the control room, and as the units got larger panel space was in short supply. By the late 70s some of these indicators, control switches, and value displays that were not needed except during maintenance periods were located in an adjacent room.
        One such valve was at the center of the TMI 2 accident. The unit was in the final stages of start up, which involves brief periods of on-line operation interspersed with shut downs for adjustment, fixes, etc. When the operators were restarting the unit after a down period they were proceeding under the assumption a particular seldom-changed valve position closed when in fact it was open (it may have been vice versa; I don’t recall for sure). Some variables began changing in unexpected directions and when the operators took corrective actions based on their erroneous assumption they exacerbated the problem instead of resolving it. This went on for several hours until someone went into the back room where the valve indicator was located and discovered the cause of the issue. By that time, however, the damage was done.
        My employer at the time was one of the leading suppliers of computer systems that monitored fossil-fired power plants, and we had installations that had gone into commercial operation nearly a decade earlier. Perhaps the single greatest advantage they offered was the ability to consolidate and prioritize operational data for presentation to the operators on CRT displays. My employer had seriously investigated the nuclear power market segment but found the regulatory hurdles too burdensome.

        1. Michaelmas

          @ ex-PFC Chuck —

          Thanks for your very interesting input.

          In particular, you wrote: ‘…during the 1960s and 1970s, while most process industries were making the transition from electronic and pneumatic analog technologies into the digital computer age, nuclear power remained firmly in the former … as unit size increased, so also did the number of valves, switches, etc. to be monitored and controlled, and the number of process values, such as pressures, and temperatures …. Some of these latter also had to be permanently recorded … with strip chart recorders … In the analog age each one of these status and variable “points” required space on the panel in the control room.’

          This all raises a question.

          The fact is, beyond any general risk, nuclear would have had — and has — very specific requirements for safety if one were transitioning reactor control panels from being old-school arrays of analog electromechanical displays, gauges, and sliders, switches, and buttons, to digital controls.

          To whit: neutrons coming straight off a reactor can tear through semiconductor crystals like subatomic bullets. Even a single charged particle can smash thousands of electrons loose, causing signal spikes and electronic noise.

          So building digital reactor control panels would have needed some serious thinking about what might and might not need to be radiation-hardened, and even what should remain analog.

          Do you or anybody else in the NC commentariat have any information about what modern nuclear reactor control panels look like in this regard and how they work?

  5. ChrisFromGeorgia

    One of the perverse features of the Covid-19 airline industry wrecking ball is that it makes the colossal mismanagement of the Boeing 737 Max less consequential.

    Actually I see the glass more half full here. If it hadn’t been for COVID, we wouldn’t have had nearly as many airline bankruptcies and restructurings, which force those airlines to cancel their purchasing contracts for the MAX.

    Norwegian, LatAm, Avianca, and others have all gone into bankruptcy and dumped MAX orders. That is a bunch of smoking holes in the ground that mercifully won’t happen.

    Many others like American are debt-laden zombies that are in no financial position to purchase or even take delivery on new planes. American did a lease-back transaction to dump some MAX jets with one of the leasing companies, and financing expired for 17 MAX planes they had planned to take delivery on, putting those orders into severe question.

    There is a global glut of planes and that may have saved a lot of lives.

  6. campbeln

    Dennis Muilenburg, who was ousted at the end of 2019 following repeated delays in getting the plane back into service.

    Love how the damage to the brand, the loss of life, and all the rest seemingly didn’t factor in… it was the interruption of da’money that caused his removal.

    If that doesn’t tell you all you need to know about Boeing’s return to service efforts for the MAX…

    1. d

      or not. depends on how old and efficient the current planes are. but if the airlines are just cutting flights it might not matter. for now

  7. Synoia

    Here is my wiew of the Boing 727 Max fix

    Management “Make the 737 Max Flyable by current ly certified 737 Pilots”
    Engineers ” Phew, we managed to make the 737 Max nearly the same to fly as the 737″
    Marketing “Can we saw it is the same, and delete that part of the manual?”
    Management “You’d better.”
    Engineers “Shuffle their feet, and mumble ‘Under the best case scenarios'”
    Management “Ok, Marketing go ahead wit the identical claim”
    Management “Kwwp bilding plabes, there will be a simple fix”
    Engineers (Sotto Voche) ‘How do we fix something that is already the best we can do?”
    Management “Why are you thinking and not doing? Engineers are easy to replace!!”
    Management “Our Stock Options and Bonuses are a risk, fire so Engineers.”

    Engineers “Try this”
    Pilots “Oh Shit”
    Engineers “Try That”
    Pilots “Oh Shit”
    Management “Why is this taking so long? Don’t answer that, just fix it”
    Management “Fires some engineers.”
    Engineers “Try the other”
    Pilots “Oh Shit!!!”
    Engineers “Try Doing it on the Left or Right”
    Pilots “Thats the best you can do?”
    Management “It is fixed, slide it past the FAA”

    and so it goes on, trying the fix a hardware problem, that the Max is a different Airplane from the 737 it replaces, with software.

    When the real problem is that any Company where a single person is both CEO and Chairman of the Board has a conflict of interest that cannot be cured.

  8. VietnamVet

    The perils of Boeing boil down to the prevailing neoliberal ideology that greed is good. Corporate officers milked out the last dollar from the company for themselves and rich stockholders, ignoring the risks to people and environment. The Obama Administration gave a universal get out of jail card to CEOs. In a Hillary Clinton administration, type certification and industry self certification were already in place. The 737 Maxes would have crashed anyhow. FAA projected MCAS could cause 15 more crashes over the model’s service life if uncorrected.

    When the China was hit by the coronavirus pandemic Hillary Clinton would not have stopped flights out of Asia let alone Europe. Corporations would have vetoed it. The highly contagious virus would have infected the USA. Her Administrator, Dr. Anthony Fauci would have said Face Masks were unnecessary due to the limited number needed for medical workers.

    The deaths, the crash of air travel and the resulting economic depression were all caused by the discarding of engineering and science to make a quick buck. Dismantling government to cut taxes and end regulation. The protests in Seattle and Portland at their core are driven by the fact that federal government and global corporations don’t given a damn for the little people for the past four decades.

  9. d

    given the airlines problems, its no surprise that they cancel almost all of their orders that havent been delivered yet. they have existential problems (like going out of business ones). wont be surprised if all orders end up being dumped (since the carriers are also cancelling flights…..dont need planes for fewer flights…)
    i did see a story where Airbus is also in big trouble too. course they didnt mess up their big new plane…yet. they might have learned from their own experience with Boeing bug

  10. Dick Swenson

    This is the story that keeps on giving.

    The story does not seem to address the issue of “will Boeing still insist that pilots can be trained on a computer simulation?” Another topic it avoids is just what what might be the economic long-term impact on the US of losing Boeing as a major US non-military exporter if the 737Max continues to be non-flyable?

    Has Boeing been saved by the more major event: Covid-19 and the reduction in flying by the public? Or are all the cards simply falling more slowly?

  11. Kelly

    This all goes back to Boeing’s merger with McDonnell Douglas. MD was like a greed virus infecting Boeing. Long timers lamented the fact that the cutthroat MD people were destroying Boeing’s engineering culture for financial gain.

    Boeing would have been smart to clean sheet a new 737 starting in 2002. It would have been wider, more comfortable, lighter, smarter, and with a taller profile, accommodating the trend towards larger engines. It would have been out of research and flying in 2017.

    In fact, the most effective plane that Boeing made (in terms of capability, range, comfort, and maintenance) were the 757-200 and 757-300. Airlines, passengers and pilots love the plane because it is easy to fly and repair, and fits many mission profiles, and they should have used economies of scale to create 757s that would fit the economics of the long range 737, rather than trying to upgrade the 737. It can accommodate late model engines, new wings, and variable missions. Bring back the light heavy!

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