Congressional Panel to Probe Max 737 Jets
By Scott Reeves, China Daily | May 13, 2019
Boeing has met with some airlines and carriers to discuss software updates
Boeing faces major technical and public relations problems as it prepares for this week's hearing of US House of Representatives subcommittee on the status of the 737 Max airliner.
Daniel Elwell, acting administrator of the Federal Aviation Administration, or FAA, and Robert Sumwalt, chairman of the National Transportation Safety Board, are scheduled to testify Wednesday in Washington, announced Representative Peter DeFazio, a Democrat from Oregon and chairman of the Aviation Subcommittee of the Transportation and Infrastructure Committee.
"Boeing continues to support the ongoing accident investigations and is committed to working closely with members of Congress, their staff and relevant officials," Peter Pedraza, a spokesman for Boeing in Chicago, said in a statement.
All Boeing Max jets were grounded worldwide following crashes on March 10 in Ethiopia and October 29, 2018, in Indonesia. They killed a total of 346 passengers and crew. Preliminary investigations suggest the aircraft's Maneuvering Characteristics Augmentation System, an automated anti-stall device, may have forced the noses of Lion Air and Ethiopian Airlines flights down and into a fatal plunge when it erroneously determined the aircraft were about to stall.
Boeing has met with Southwest, American and United - the three US airlines that fly the 737 Max - and European carriers to discuss safety and software updates. The company has hired a public relations company and may run advertisements to promote the plane, The New York Times reported.
The pilot or co-pilot can turn off the Max 737's automated system by pressing a button on the center console. But some pilots in the US have said Boeing did not fully inform them about the system. A group of pilots developed an ad hoc manual explaining its use and circulated it among pilots who flew the jets.
Boeing's test pilots may not have known how quickly the automated anti-stall device would activate or how steeply it would point the nose of the plane down, The Wall Street Journal reported.
The Seattle Times reported that federal regulators delegated much of the plane's safety review to Boeing and that the company's analysis contained key flaws. James Hall, former chairman of the Safety Board, told China Daily that lack of rigorous federal oversight may have led to problems with Max jets.
The Post and Courier newspaper in Charleston, South Carolina, reported that some assembly activity was not rigorously checked by supervisors after mechanics approved their own work at a Boeing plant near Charleston. Reportedly, tools and debris have been discovered in the bodies of new planes before the planes were delivered to customers.
Questions about the Max planes are beginning to hurt Boeing. In March, Boeing booked 44 orders valued at US$6.87 billion while Airbus, its European rival, booked 58 orders valued at US$6.92 billion. Wall Street analysts expect Boeing to spend about US$1 billion to update and install new software for the anti-stall system.
Nevertheless, analysts expect the company to prosper in the future. Eight Wall Street investment banks or equity research firms, including Morgan Stanley and Citigroup, rate Boeing's stock "buy" while five rate the stock "hold". None rate the shares "sell". A survey conducted by TipRanks of 22 analysts setting 12-month price targets since the crashes found the average price target was US$428 a share with a high of US$500 and a low of US$333. A price target is an analyst's projected future value of a stock and it may change as new information becomes available.
Boeing also faces lawsuits filed by families of those killed in the crashes alleging wrongful death, negligence and product liability. A federal court in Chicago is likely to delay action on the cases until the investigation is complete and the causes of the crashes are known, Robert Rabin, a law professor at Stanford University told China Daily. The US legal system tends to be more generous in awarding damages than any other in the world, Mark Dombroff, a Virginia attorney told China Daily.