Sorry Boeing, you are not America

We all love Michael O’Leary, (Ryanair) for various reasons. But most of all, we love him for being one of the few airline executives apart from Akbar Al Baker of Qatar Airways who “tells it like it is” in every scenario. Recently, on an investors call, he stated, “that Boeing needs to get its shit together” and that their original orders for 58 aircraft may become 30, or 20 or 10 or ZERO if this continues. The Boeing 737 MAX has become somewhat of an existential crisis for the company. After the initial crash of the Lion Air jet in October 2018, Boeing remained in denial, refused to take responsibility and initially blamed the pilots and the airline. It sadly took the Ethiopian crash in March 2019 for Boeing to wake up and realize they have a big problem on their hands. 

Source - https://www.aerotime.aero/rytis.beresnevicius/23728-boeing-737-max-crisis

However, this did not change their conduct, response or attitude towards the crashes or the families of the 346 people who lost their lives. There was a press conference after protracted silence, followed by some ill-timed and ill-conceived statements, where the beleaguered CEO Denis Muilenberg, kept saying that the plane would be the safest plane in the world. He also reiterated it will return to service soon and most depressing of all kept repeating, “We own it” which was a very vague statement, legally drafted to avert any direct admission of liability or wrongdoing. Do watch the disastrous press conference here - Link - https://www.youtube.com/watch?v=8hmdN5fMNBU

I was among the millions who saw this live, who tracks aviation, studies and obsesses about it and who once had huge love and respect for this wonderful and innovative company. While a few of us in the #AvGeek community have been quite critical of Boeing in the past (especially on the Bombardier issue read - https://www.dhirubhai.net/pulse/boeing-must-stand-brilliance-innovation-bullying-naraayan-kannan/), we still believed in their power to innovate and transform lives. Nevertheless, MCAS has changed our position on the company, and ‘earning or re-earning our trust’ is not going to be easy, it is going to be nearly impossible. Moreover, this is not because their planes crashed, it is because of the way they responded to the crashes and its aftermath.  

Why do these incidents matter?

Most passengers do not know what equipment they fly on, if you read my previous articles on the rise of twinjets (link - https://www.dhirubhai.net/pulse/sadly-twinjets-future-naraayan-kannan/), I realized with great surprise that most people do not read their tickets, care about what they fly or take interest in learning about their aircraft. While this was true, these two crashes have changed a lot for Boeing with regard to people wanting to know what they fly, which is a new phenomenon. I have seen non-professionals asking airlines if they are flying on a “MAX” because even though they are not aviation buffs or technical people, they do not want to be on the this (wrong) aircraft. It is unfortunate that it took two crashes to transform Boeing’s outlook from a B2B company to a B2C company, something they failed to fathom within the 5 months between the first and second crash. Now, the MAX is a term that is common to many, local parlance to many frequent flyers and almost a bad word in many quarters, as it now stands for irresponsible manufacturing and cutting corners. It is also synonymous with MCAS, sad but true. 

Boeing does not sell to us; it sells to airlines, so they automatically assumed that their “fix” would be more significant to their direct customers, the airlines and not to the end consumer. Their attitude reflects another disturbing trend in American domestic political culture and foreign policy – Boeing has started thinking they can do anything they want, get away with anything because they are American and the biggest aerospace company in the world. 

This cultural misconception and element of misguided thinking is at the crux of their problems right now, while the MAX is a symptom of their thought and actions. 

Everyone now knows the MCAS was installed to correct the abnormal pitch of the aircraft (trim the angle of attack), which was a consequence of Boeing’s insistence to install bigger engine nacelles on an airframe, which was over 50 years old and unsuited for the upgrade (Read more on this link - https://theaircurrent.com/aviation-safety/what-is-the-boeing-737-max-maneuvering-characteristics-augmentation-system-mcas-jt610/).

This was to save costs on the development of a new airframe especially when Airbus had beaten them to the market. This was over and above the decision not to overhaul or upgrade the B757, which was an option, which according to some experts was structurally more suited for the new and larger engines, this was so that they can compete with Airbus quickly. Gaining market share in the extremely competitive narrow body aircraft segment was what Boeing cared about, which saw the A320 lead the way with a better, fuel-efficient second version of their largest selling narrow body variant. 

Herein lies the problem, Boeing assumed because they are the biggest and an American company, so they would automatically be exempt from the “rules” just as Donald Trump’s America behaves and conducts itself domestically and internationally. In a rules-based system, all players are expected to follow the rules for individual good and overall good for the group. But MCAS and the self-certification process that followed did not adhere to any of these principles of due process and certification hygiene. 

Everyone who has a stake in this issue and is interested to study this in detail must follow the seminal work done by Dominic Gates, the aerospace reporter at the Seattle Times who has been the primordial cause of so much public discussion and enhanced regulatory oversight on Boeing. His reporting on the MAX and MCAS has been nothing short of a potential Pulitzer Prize winning investigation into the multiple lapses in safety and disregard for due process in certification. 

Boeing wrongly assumed that the 737 MAX will succeed despite its defects and the balance could be fixed after it is in service than prior. 

It was quite an expensive assumption. 

Boeing and US, too big and powerful?

Boeing has misunderstood themselves as synonymous with the US Government, as the attitudes of the US as a nation can filter down to them in corporate action, that reinforces the notion that unethical behavior has no consequences. When your President conducts himself in a certain way, publicly, it provides the rest of the country permission to emulate him explicitly (See Meryl Streep’s speech at the 2017 Golden Globes). The stock price is reminding them that this assumption is false; over 100-parked 737 MAX aircraft at Renton in the parking lot reinforces this false assumption. The global grounding of the aircraft proves that the US Government and Donald Trump’s brash attitude and contempt for rules cannot limit retaliatory action now as several countries grounded the aircraft much before the FAA did! Many American airlines and travellers around the world have limited options beyond the MAX for short haul routes within continental US, as airlines have now changed their schedules for the rest of 2019 which would have largely been operated on the MAX (barring Delta, the only airline which did not order the MAX). Boeing forgets that American action these days, however unilateral and heavy-handed have started receiving commensurate and proportionate responses from other state actors. It affects the US economy as a result, despite short-term domestic political gains with Trump’s base of support. 

President Trump regularly speaks and tweets inappropriately, makes impetuous statements, conducts foreign policy with disdain, disrespects global rules / systems and terminates agreements with little fear of retribution. Does Boeing think that they can emulate its President’s cultural disposition in their business and manufacturing ethos? Does it feel it is working and that airlines / passengers will still look the other way while it fails regulatory oversight? 

Stop Rushing, Slow Down and Solve the Problem 

The skeletons from the 737 MAX programme continue to tumble; now as of last week, the now awakened FAA has now ascertained the following:

Boeing Co plans further changes to the software architecture of the 737 MAX flight-control system to address a flaw discovered after a test in June, two people briefed on the matter said late on Thursday. The redesign, first reported by the Seattle Times, involves using and receiving input from both flight control computers rather than one. The move comes in response to an effort to address a problem discovered in June during a Federal Aviation Administration (FAA) simulator test. This is on top of earlier announced changes to take input from both angle-of-attack sensors in the MCAS anti-stall system linked to two deadly crashes that led to a global grounding of the plane.

Source - https://www.airlive.net/boeing-plans-further-changes-to-the-software-architecture-of-the-737max-flight-control-system/

This means two things, first, the 737 MAX flight control systems will undergo a massive overhaul and change to receive inputs from two flight computers instead of one which was the case earlier. This is so that redundancies are higher and flight safety is not compromised due to one flawed sensor reading being interpreted by one flight computer. Nobody is confident this can be done by October (realistically 2020 according to many senior executives), and it should not be rushed. The rush to complete this quickly is what got Boeing into this quandary in the first place, so FAA should ensure that it is completed correctly and not quickly. If it cannot be completed due to more complexity or no-go areas ahead, hard decisions must follow. Most people will recall the pilots were asked to take refreshers courses and training on an iPad, to save on simulator costs for airlines thereby creating more cost savings for existing operators (while most of them were not informed about MCAS at all). 

The second, and more important aspect to Boeing, is that the delay will cause more airlines to cut or cancel their orders, as their plans for the next few years hinged on this aircraft’s presence and viability. Airlines like Southwest, FlyDubai, Lion Air, Garuda, American, Norwegian, SpiceJet, United, VietJet all ordered in excess of 100 aircraft will now soon be force to reconsider their choice if the delay is extended. Industry observers were taken by shock when IAG boss, Willie Walsh ordered 200 MAX aircraft at the Paris Air Show, citing “unhappiness” with Airbus and with the belief that the issues with the MAX will be sorted very soon. Production at Boeing continues unabated, with new aircraft being parked anywhere they can find space in the assumption that the ‘fix’ will follow, and the parked aircraft will soon fly after FAA certification. 

Potato or Potato?

Now, that most of the flying public knows the name MAX, its infamous association with two crashes, it’s inevitable connection with Boeing indifference and apathy; Boeing has now started another dubious exercise to rename the aircraft. The MAX is now being rechristened as a new aircraft to mislead passengers after their initial tactics to delay, defer and deny responsibility on the crashes. The new name, 737-8200 (seen on a Ryanair aircraft ) is bound to fool no-one as the entire sequence of events has now entered the mind space of the general public and many will not board the aircraft with any name, for at least 6 – 8 months as per polls conducted online and if they do, it will be a low percentage. (see - https://www.businessinsider.in/53-American-adults-say-they-dont-want-to-fly-on-a-Boeing-737-Max/articleshow/68472719.cms)

Source - https://www.bbc.com/news/business-48995509

Hard decisions for Boeing would mean halting production, or worse, scrapping the MAX programme completely while investing in a new airframe and protecting its reputation, while safeguarding its more valuable 777X programme, which is also now inordinately delayed (FAA oversight now fully functioning on its engine issues). Boeing must consider taking some of the above-mentioned steps to safeguard additional damage to its reputation, which is already at a low point in history like never before. 

Boeing also faces issues with other planes. It said its first flight of the 777X - the latest iteration of its popular long-range twin-aisle aircraft - is now delayed until early 2020 due to the engine problems announced last month, while its current plan for a first delivery to customers in late 2020 faced significant risk.

Source - https://www.reuters.com/article/us-boeing-results/boeing-posts-biggest-loss-on-737-max-may-have-to-halt-production-of-jet-idUSKCN1UJ1G9

In order to increase profits, they rushed the 737 MAX programme, they are facing challenges in every critical programme barring the 777, 787 and 747-8i productions lines. Boeing has recently announced an indefinite delay in the NMA (New Mid-Market Airplane) which was a crucial project for the company heading into the next decade as there are many customers waiting for this aircraft as air travel expands and fleet optimization becomes better. 

Boeing’s net loss for the second quarter was $2.94 billion, compared with a profit of $2.20 billion in the same period last year. Doing the right thing, even if it means a delay in the 737 MAX programme or a complete overhaul of the programme would be the right thing to do. I for one, along with many of my AvGeek community members will think twice about boarding this type for the near future. 

Running to Daddy?

Not much the US President can do for Boeing despite their apparent closeness, especially when US domestic airlines are buying Airbus aircraft over Boeing. This is because it makes better commercial sense for airlines basis their route planning and aircraft inductions schedules. Airlines make commercial decisions led by fuel economics, route planning, consumer preferences and safety, all linked to profitability. In a recent meeting with airlines executives, which CNBC reported exclusively, Trump apparently lost his temper at Ed Bastian (in absentia) on why Delta has ordered Airbus jets instead of Boeing, while Boeing led by the US Government and Qatar Airways signed a deal for Boeing 777s in the White House. See Link: https://www.cnbc.com/2019/07/29/inside-trumps-apprentice-worthy-showdown-with-airline-ceos.html

What President Trump knows well as a former businessman and failed airline owner, is that Airlines will do what is necessary to ensure profitability. While passengers will continue avoiding the MAX as long as it is required, Boeing needs to take tough decisions on the 737 programme for their tattered reputation and to send a signal to the markets, customers and passengers across the world. They must remind themselves they are only a company that is limited by the choices of passengers and airlines worldwide, that this dependency is not overcome by American influence. They cannot get away with wrongdoing and American hegemony or Presidential influence does not extend to its sales. Presidents and administrations change, damaged reputations do not. An indication of this was witnessed recently at the Global Business Travel Association 2019 Convention, where half the audience in the hall where Denis Muilenberg was scheduled to speak proceeded to exit the hall upon the announcement of his name. We can safely call this the MAX effect. 

Boeing is not America, although America can continue using Boeing as an instrument of statecraft and diplomacy; the reverse cannot be justified or conducted successfully, especially in the case of the 737 MAX due to the two crashes, which have claimed the lives of over 346 people. 

Boeing’s business and operational culture must undergo change, as the cost they are bearing now with lawsuits, investigations, settlements, and redesign in totality for their mistakes is higher than the money they would have spent for developing a new airframe. In life, you either pay now, or you pay later, but you always end up paying. Ethical behaviour is always cost-effective behaviour, even if it is not profitable in the short term. Boeing must be better than President Trump and the US and must be held accountable to a higher standard. By emulating President Trump and the US Government’s conduct, Boeing has blurred the lines between itself and the country it derives its influence and power while eroding its credibility globally. 

Let us all thank the wonderfully blunt Michael O’Leary for articulating what we are all thinking but have refrained from saying. Get your shit together Boeing.