Boeing needs to come up with answers quickly


In the wake of the Lion Air crash in Indonesia, it emerged that the 737 Max contains software that forces the plane’s nose down in certain circumstances to prevent it stalling. Some pilots weren’t aware of the safety system and felt they should have been told. The New York Times reported that the manufacturer wanted to keep additional pilot training to a minimum (the 737 Max competes with Airbus SE’s 320neo).

Boeing insisted, however, that all pilots know how to override the plane’s automated systems. In view of the Lion Air disaster, it would be surprising if the Ethiopian Airlines pilot was unaware of this procedure. So it’s quite possible the causes of these two crashes are unrelated.

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Until there is clarity about the circumstances of the latest disaster, though, some passengers will naturally be anxious about flying on the aircraft. Airline owners of the 737 Max, which include Southwest Airlines and American Airlines Group, are monitoring the investigation closely. That the two crashes of a new model of aircraft happened so closely together will add to the sense of urgency.

Given China’s and Ethiopian Airlines’ grounding of Boeing 737 Max planes after the latest crash, there are naturally questions about whether this will now be extended to the global fleet. Such a scenario would obviously be a huge reputational blow to Boeing, which delivered more than 250 Max planes last year and is ramping up production to fulfill more than 5,000 orders. The plane is sold out until 2023.

The jet’s sales success is a big reason why Boeing’s shares are close to a record high and analysts expect it to generate about $US15 billion of free cash flow this year. On Monday, its shares have fallen around 6 per cent to $US352.72 in late trade.

Boeing shares slumped on Monday.Credit:AP

But all of that is secondary to Sunday’s tragedy. Up until now, it was to the credit of Boeing, Airbus and the airlines that passengers could board a commercial aircraft knowing that a crash was incredibly unlikely.

While this remains the case, that there’s even a sliver of doubt about a top-selling aircraft type is a shocking development. Passengers and airlines need answers, quickly.

Bloomberg



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