Boeing 737 MAX Cleared to Fly Again, Amidst Plummeting Demand for Air Travel and Aircraft as a Result of COVID-19

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

The Wall Street Journal features an article today on the Boeing 737 MAX being cleared to fly again, Boeing 737 MAX Cleared to Fly Again, but Covid-19 Has Sapped Demand.

Unfortunately, the CoVID-19 crisis has killed demand for air travel and new aircraft, especially a model that crashed twice and revealed the details of the sausage-making  of Federal Aviation Authority (FAA) regulatory decisions.

The FAA’s chief, Stephen Dickson, signed a formal order today lifting the grounding, 20 months after the original suspension decision,  according to the New York Times, Boeing 737 Max i s Cleared by F.A.A. to Fly Again. The F.A.A. really had no choice in instituting a flying ban for the 737 MAX, as i was merely joining other countries that had already done so.

Over to the WSJ;

The U.S. on Wednesday approved Boeing Co. BA 3.78% ’s 737 MAX jets for passenger flights again after dual crashes took 346 lives, helping to resolve the plane maker’s biggest pre-pandemic crisis.

The Federal Aviation Administration’s official order to release the MAX, grounded since March 2019, comes as the beleaguered Chicago aerospace giant grapples with a host of new problems amid the continuing health crisis.

The FAA’s order for ungrounding would allow Boeing to resume delivering the jets to airlines and let them carry passengers. But the pandemic has sapped demand for air travel, prompting airlines and aircraft-leasing firms to cancel about 10% of Boeing’s outstanding MAX orders this year. Boeing has said it believes hundreds more of its remaining 4,102 orders could be in jeopardy.

By its action, the FAA concluded that the company had addressed the problems that caused the crashes. Over to the NYT:

Investigators have attributed the crashes to a range of problems, including engineering fl mismanagement and a lack of federal oversight. At the root was software known as MCAS, which was designed to automatically push the plane’s nose down in certain situations and has been blamed for both crashes.

In August, the F.A.A. determined that a series of proposals by Boeing — including changes to MCAS, flight crew training and the jet’s design — “effectively mitigate” its safety concerns. Mr. Dickson, a former Delta Air Lines pilot, took the controls on a test flight in September, saying he liked what he saw.

The situation has already cost the company billions of dollars. As Naked Capitalism has  written previously, even before the pandemic began, Boeing was unlikely to recoup its costs anytime soon, let alone turn a profit. The fallout from crashes of a Lion Air Jet in October 2018 and an Ethiopian  Airlines flight in March 2019 has only worsened as the prospects for most world airlines are in freefall. The WSJ says:

The manufacturer has estimated the debacle had cost it about $20 billion, which includes financial hits related to halting production earlier this year. Engineering mistakes and management lapses provoked a tangle of civil litigation, a criminal investigation and congressional scrutiny.

Restoring trust in its oviduct during the current parlous operating conditions for world airline is an uphilll battle. According to the WSJ:

Meanwhile, the plane maker has said it is working to restore credibility with the public. In planning for the MAX’s return, airlines have said they considered potential passenger reaction, conducting their own surveys and laying out plans to rebook any nervous travelers on different aircraft.

The MAX debacle prompted consternation among some of the company’s biggest customers, sparked a boardroom and management shake-up inside Boeing and pushed the plane maker to revamp internal engineering and safety-reporting procedures.

This year, Boeing customers have either walked away from jets whose delivery has been delayed more than a year, as their contracts typically allow them to do without penalty, or put off taking the aircraft to future years when, according to industry predictions, air travel recovers toward pre-pandemic levels.

Airlines around the world have been struggling financially throughout the pandemic, in many cases putting the brakes on long-planned airplane purchases as they lay off thousands of employees, save cash and restructure debts. Some have stopped flying altogether, further expanding the glut of planes.

Not everyone is satisfied with the steps taken by the company so far. As the NYT reports:

In a news conference on Tuesday in anticipation of the F.A.A. announcement, relatives of victims on the second plane that crashed, Ethiopian Airlines Flight 302, questioned whether Boeing had done enough to address safety concerns with the plane.

“Aviation should not be a trial-and-error process; it should be about safety,” said Naoise Ryan, whose husband, Mick, was aboard that flight on March 10, 2019. “If safety is not prioritized, then these companies should not be in business.”

The Bottom Line

Will Boeing be able to recover from this debacle, amidst the ongoing pandemic’s effects on air travel? I don’t think so.

 

 

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27 comments

  1. Only in US for now

    AFAIK, this is ONLY for the US. From PPRune, Canadian authorities are aware of the FAA decision, but are conducting their own review and as of now the 737 Max CANNOT fly in Canadian airspace.

    Reply
  2. lincoln

    If the 737 has problems because its engine is too big for its airframe, then why not just build a better airplane instead?

    Reply
    1. JBird4049

      Money. Boeing’s management was, and probably still is, focused on getting as much profit it can steal without any considerations for safety.

      IIRC, Airbus got ahead of Boeing developing a new airplane for the same kind of use as the 737 is used for. This meant likely losing sales, profits, and executives’ bonuses. Boeing already had been planning to replace the 737 with a new, modern, more fuel efficient airplane, but Airbus would be eating sales. It also takes years and a lot of money to create a completely new model. Creating the kludged up 737 Max and lying about just how different the plane was enabled the company to shortcut development time and money as well. They counted on the override that did not fully explained to anyone about to keep the plane safe. If they had, at the very least there would have been some delay as all the pilots were trained for it: what it is, what could go wrong, and how to deal with that. But that would have cost money and one of the supposed benefits of the new model was no real need for recertification and pilot training.

      Reply
    2. Thor's Hammer

      There are striking parallels between the Boeing MAX 737 fiasco and the US Electoral System failure. Boeing tried to use a single input software system to remove control of the aircraft from the pilot when it’s inherit instability started to take control. (While failing to warn the pilots) What could possibly go wrong? The 737 MAX airframe design is fundamentally unsound. The only flights the 737 MAX should ever be allowed to undertake is the flight from wherever they are stored to the breakers yard where they could be stripped..

      The US electoral system is as fundamentally unsound as the 737 MAX aircraft. It’s purpose is to provide a charade of Democracy while ensuring that the political system delivers 99% of the benefits to the .001% who are what Little Bush called the Deciders. And with the fiasco of the 2020 presidential election the electoral system totally failed in its primary mission. 68% of the USA population believe that the election was fraudulent, and half don’t care as long as it got rid of Trump and disenfranchised his Deplorable followers. And the World laughs at our claims of being a Democracy worthy of leading the world.

      Just like the Boeing MAX, the Dominion single player software system was designed to fail as a device to fairly tabulate votes. Instead it was created as a system with an open door to enable votes to be switched as needed to ensure victory for the party in control of vote counting.

      The electoral system in the US is inherently flawed, and like the MAX, needs to be relegated to the scrap yard. A national election system that reflects the will of a people in a democracy needs to start with the principle of “One Person, One Vote.”

      —Eliminate voting by State and all the corrupt baggage that comes with it.
      —Run-off style voting for President, with the first ballot listing every candidate who can garner 100,000 signatures on their individual ticket.
      — Non-partisan voter registration with registered voters issued ID cards containing unique digital ID, fingerprint, and residence information.
      — Ballots digitally scanned for match with registration card.before being released to voter.
      — Every ballot backed up by two paper copies, one of which is retained by the voter.
      — Prohibit mail-in ballots, just as most of Europe does.
      — Initial counting by computer with the results live and public.
      — Vote counting machines available to all registered candidates 90 days before the election so their professional hackers can examine them for hidden vulnerabilities.
      —Random distribution of machines to polling places tracked by digital ID.
      — Automatic hand audit of all paper ballots wherever the computer results are within the margin of error.
      — Hand audit of paper ballots whenever an algorithm set before voting begins flags mathematically illogical trends in the computerized voting results.

      Reply
  3. dcrane

    They seem to be dropping the “MAX” from the names of these planes, now calling them the 737-8 and 737-9, which will make things more confusing for travelers who wish to keep track. The older 737 NG models include a 737-800 and 737-900.

    Reply
  4. Thuto

    With this decision, the FAA crosses the rubicon. It’s destiny and continued existence as an institution that advocates for the interests of the flying public around the world is perhaps now inextricably linked to that of Boeing in general and the 737max in particular. If this decision is based on backroom dealings and not an exhaustive, top to bottom, inside out appraisal of not only this particular aircraft’s readiness to fly, but the whole culture at Boeing, and there’s another crash, then it’s curtains for FAA as a trustworthy institution.

    Reply
    1. PlutoniumKun

      Given that certification has taken more than a year more than Boeing had originally hoped/anticipated, I think its likely that the FAA have done a reasonably thorough job. The problem of course is FAA certification is no longer considered the gold standard worldwide, and that is entirely their fault.

      It will be interesting to see how other national/regional regulators respond. Some of course may have their own nationalistic considerations (the Europeans and Chinese have seen this as an opportunity for their own aircraft), but I think if the FAA have done anything less than a thorough job, we’ll see further delays as Boeing seeks to get approval globally. Other regulators will not have any incentive to rubber stamp FAA approvals in future.

      Reply
      1. Thuto

        One hopes they have indeed done a thorough job on this PK, the stakes don’t get higher than this. Only time will tell whether this episode marks the beginning of a reversal of the malign effects of regulatory capture and its logical consequence, crapification.

        Reply
  5. dcrane

    I’m not a pilot but in reading about this it seemed that the MCAS system was brought in to make the new MAX models behave aerodynamically like older 737s despite the forward placement of the new larger engines, thus avoiding expensive recertification/retraining requirements. So has Boeing (1) found another way to meet those requirements mechanically, (2) found a way to train pilots to better manage MCAS when it operates, or (3) altered or removed MCAS and found a way to get the FAA to let them duck the original requirements?

    So far it’s not obvious that much has changed, so I’m concerned about flying on these planes.

    Reply
    1. Jack

      Hi dcrane! NC has multiple in depth articles about the Boeing Max debacle. Just do a search and read away! You will be completely up to speed on the whole fiasco and who did what and to who.

      Reply
  6. rtah100

    Restoring trust in its oviduct?

    Is this a rather elliptical way of saying the Max was the goose that laid the golden egg? Or a predictive spellcheck using Nate Silver’s algorithms?

    Reply
  7. TimH

    So what happened about the institutionalised quality failures at Boeing, wrenches left inside etc? I say institutionalised because of the treatment to whistleblowers. Was that culture fixed?

    Reply
  8. drumlin woodchuckles

    Some people will decide to let other people be the beta testers of these 737-etc. SuperMax planes. I will spend a few years letting other people take the big risk.

    Reply
    1. dcrane

      Thanks for that. So it looks like the new software disables MCAS if the angle-of-attack sensors disagree.

      Here is my question: MCAS was put on the plane to get it to conform to certain aerodynamic requirements for type certification. Doesn’t disabling it mean that the plane no longer meets those requirements? And why is the FAA allowing this?

      Reply
  9. VietnamVet

    The 737 Max debacle that killed 346 passengers and crew was a prelude to coronavirus running wild in the West. At their core, the crises are one and the same. The billionaire/corporate seizure of western government. FAA, FDA and CDC are corporate toadies whose sole interest is increasing the wealth of the rich. The revolving door assures this. Since the Obama/Biden Administration, no American “to be to fail” CEO has been jailed for their crimes. Safety is ignored. PG&E killed 85 people in Paradise CA. A quarter of million Americans died from COVID-19 to date.

    The prudent will wait to fly the Max or to be injected the first ever mRNA vaccine. Without a functioning government, everyone is on their own. Corporate/Social Media Owners have a vested interest in keeping the current neoliberal capitalist system. This is why there is no reality anymore. Myths and magical thinking (infinite growth in a finite world) require the ignoring of the truth and the end of the rule of law.

    Reply
  10. The Rev Kev

    “Effectively mitigate” its safety concerns? What that means is that those concerns have never gone away and are being masked by the software updates and crew training sessions. The problem of those oversize engines remain the same. Who knew that broken trust actually has a multi-billion dollar price tag attached to it? You think that the saga of the Ford Pinto would be warning enough of the possible repercussions. And yet you have new Ford Kugas bursting into flames today. Maybe Boeing figured that if car companies could get away with it, why not aircraft manufacturers.

    Reply
    1. John Wright

      Boeing might be getting a bitter lesson from Ford’s Pinto experience and the public relations damage it did to Ford..

      From https://www.popularmechanics.com/cars/a6700/top-automotive-engineering-failures-ford-pinto-fuel-tanks/

      Note, Ford anticipated the gas tank design causing injury/death and did the financial math BEFORE it started production.

      “Ford did a cost-benefit analysis. To fix the problems would cost an additional $11 per vehicle, and Ford weighed that $11 against the projected injury claims for severe burns, repair-costs claim rate and mortality. The total would have been approximately $113 million (including the engineering, the production delays and the parts for tens of thousands of cars), but damage payouts would cost only about $49 million, according to Ford’s math. So the fix was nixed, and the Pinto went into production.

      “In 1978, all 1971-through-1976 Ford Pintos were recalled and upgraded with the originally proposed shielding and reinforcements. In the ensuing years, though, some doubt has been cast on the relative severity of the defect. Reports range from 27 to 180 deaths as a result of rear-impact-related fuel tank fires in the Pinto, but given the volume of more than 2.2 million vehicles sold, the death rate was not substantially different from that of vehicles by Ford’s competitors. The far more damaging result for Ford was the PR disaster. The company long endured a reputation for putting profits ahead of build quality, which, ironically, drove even more customers to foreign and competing brands. The Pinto was a painful lesson for Ford, which now routinely builds some of the safest cars on the road.”

      And Ford was made light of in humor magazines.

      I remember a “letter to the editor” in the humor magazine MAD that had “We want to protest the movie “Chariots of Fire”. We had the idea first” (signed) Ford Motor Company, Pinto Division.

      Reply
  11. jpr

    @Glen, just listening to Juan Brown shows how important it is to listen to views of those who have more than financial stake in a product (Steve Jobs’ “secret sauce” was also an intense focus on the product and not bottom line). Here are a couple of excerpts from a Fortune article (https://www.forbes.com/sites/josephholt/2020/02/03/how-boeing-lost-its-way):

    The question of whether companies should focus chiefly on profits is explored by John Kay, one of Britain’s leading economists, in Obliquity: Why Our Goals Are Best Achieved Indirectly. “Obliquity” means “indirectness,” and the fundamental idea of Kay’s book is that goals like profitability are more effectively pursued indirectly than head-on.

    Kay illustrates the concept with reference to the pursuit of happiness. He asks whether the happiest people are those most focused on their own happiness. He comes to the conclusion that they are not and cites philosopher John Stuart Mill’s autobiography for the answer that “Those only are happy… who have their minds fixed on some object other than their own happiness; on the happiness of others, on the improvement of [human]kind, even on some art or pursuit, followed not as a means, but as itself an ideal end. Aiming thus as something else, they find happiness by the way.”

    Kay’s 2010 book ironically uses Boeing as an example to illustrate that “the most profitable companies are not the most profit-oriented.”

    Kay explains that Bill Allen, Boeing’s chief executive from 1945 to 1968, said that the spirit at the company at that time was to “eat, breathe, and sleep the world of aeronautics.” While Allen was CEO the company developed the 737, the best-selling airliner of all time, and profits soared. “The oblique approach to profitability delivered spectacular results,” Kay writes.

    Kay explains that after Boeing acquired arch-rival McDonnell Douglas in 1997, however, the company’s new leadership under CEO Phil Condit signaled a culture shift from a preoccupation with technological breakthroughs to a focus on financial benchmarks.

    Boeing’s CFO at the time, Deborah Hopkins, said in a 2000 Bloomberg interview that Boeing employees shouldn’t overly focus on the planes themselves which, while “obviously important,” were already assumed to be of great quality. That scandalized and demoralized engineers and the market was none too impressed.

    The culture shift continued under Condit’s immediate successor as Boeing CEO, Harry Stonecipher, and his successor, James McNerny. Stonecipher is quoted in a 2019 article in The Atlantic as saying “When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm.”

    The disconnect between Boeing’s world-class engineers and some of its executives seems to have persisted to the present day. In a trove of disturbing internal communications released by the company last month one Boeing employee said “we have a senior leadership team that understands very little about the business and yet are driving us to certain objectives.” Another employee described the 737 MAX as a “joke.”

    Reply
  12. jpr

    Another take on how a toxic GE/McDonnell Douglas leadership mindset shook Boeing down to its foundations:

    The company that once didn’t speak finance was now, at the top, losing its ability to converse in engineering.

    It wasn’t just technical knowledge that was lost, Aboulafia said. “It was the ability to comfortably interact with an engineer who in turn feels comfortable telling you their reservations, versus calling a manager [more than] 1,500 miles away who you know has a reputation for wanting to take your pension away. It’s a very different dynamic. As a recipe for disempowering engineers in particular, you couldn’t come up with a better format.”

    https://www.theatlantic.com/ideas/archive/2019/11/how-boeing-lost-its-bearings/602188

    Reply
  13. Brooklin Bridge

    So my question would be are they still using only one sensor to determine angle of flight or have they finally come to terms with the necessity of two or more sensors being involved and (here comes the expensive part) the re-writing and re-testing and -ugg, integrating- and then re-testing again arbitrage algorithms to determine who or what is correct in the event of multiple sensors saying different things? My (very shallow and error prone) understanding is they have sort of kludged something together where they can claim two sensors are used, but the software is basically still using only one of them to avoid the integration nightmare of major chunks of totally new mission critical software. Pilot training is the one thing that is suggestive of actual improvement, but given the players one wonders if that will be more optics than substance.

    As with many others, my attention has been focused on other things over the last 10 months, but I doubt Boeing executives have had a come to Jesus moment where the notion of human life has any significance whatsoever compared to profit, any more than any other industry, so from their point of view this whole kerfuffle is still just a matter of “perception” that can be solved by cost of media and FAA control, with the ever economical if not exactly honorable last-resort technique of changing the name (who needs the “max”?), and the necessary subsidies from the taxpayer federal government to pay for it all.

    Reply
    1. larry

      BB, no matter what bullshit Boeing come up with, your queries are more than enough along with my own for me to never fly in the thing, ever. This plane should have been consigned to the scrapheap.

      Reply
    2. Jim Young

      The engineers know how to design an aerodynamically acceptable plane. I will avoid the Max versions, whatever they rename them, like the plague, and will drastically cut back on all flying (we used to do about 6 times a year). The least they could do, is convert the kludges to cargo aircraft and go back to designing aerodynamically safe aircraft that don’t require such critical computer kludges to make up for compromised aerodynamics/flight characteristics.

      Reply
    3. Brooklin Bridge

      Thanks to @Glen above, Juan Brown has provided an accurate and detailed answer to my question. I was partly correct in that while the Boeing 737 (Max, or what ever name they are hiding it under now such as 8 or 9) does indeed track two sensors now instead of just one, that’s all it does. It does not use software to arbitrate or remediate anything in the case where the two pitch sensors differ by a certain amount. Rather, it simply ceases any MCAS activity and throws the mess into the laps of the pilots to handle manually thus avoiding the whole thorny issue of integrating new sophisticated mission critical software into an old and highly complex system.

      I didn’t catch exactly how the pilots resolve the difference between the sensors (determine the actual angle of current attack) and this issue is apparently greatly exacerbated if the three speed and thrust inputs also fail all at once at such a time. At that point, according to Juan Brown, the pilots are in a pretty mess anyway, but one that must be resolved before being able to manually address the issue of pitch. Moreover, Brown emphasized that depending on actual speed, it might require the strength of both pilots trying to crank the manual pitch adjuster to effect a mere 5 units of pitch correction within what seems like a very long time given the situation that would require the maneuver. It also leaves unclear whether or not there is a point beyond which human strength could physically address the issue.

      Passengers will certainly not appreciate the distinction when, I mean if, another catastrophe occurs, but nevertheless, Boeing Executives can now put the blame for not avoiding a crash squarely on the shoulders (that can’t crank fast enough or hard enough) of the pilots, rather than on the MCAS software (that throws up its virtual hands at the first sign of a pitch conflict between two sensors).

      Personally, without knowing more, I would call this fix dubious at best and ruthlessly fixated on both cost and responsibility containment, but be that as it may, the real irony is that it actually IS an improvement.

      Reply

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