After two deadly crashes, Boeing cuts 737 Max production

Slowing down.
Slowing down.
Image: Reuters/Lindsey Wasson
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It was Boeing’s fastest-selling plane ever. But after two deadly crashes, and the grounding of its 737 Max plane worldwide, Boeing announced on Friday (April 5) it will cut production of the model from 52 to 42 jets per month from the middle of April.

The announcement came a day after Ethiopian officials published their preliminary report on the March 10 crash of Ethiopian Airlines flight 302. Black box data showed that the plane’s anti-stall system activated, sending the plane into repeated dives that the pilots were unable to counteract in spite of following the procedures recommended by Boeing. The apparent attempts to override the software were a major difference from the previous 737 Max crash of Lion Air flight 610 in Indonesia last October. Nearly 350 people were killed in the two crashes. Ethiopia urged Boeing to review the “flight controllability” of the aircraft.

Boeing acknowledged the findings regarding the 737 Max’s anti-stall feature, known formally as the Maneuvering Characteristics Augmentation System, or MCAS, in its announcement.

“We now know that the recent Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents were caused by a chain of events, with a common chain link being erroneous activation of the aircraft’s MCAS function,” said the company. “We have the responsibility to eliminate this risk, and we know how to do it. As part of this effort, we’re making progress on the 737 MAX software update that will prevent accidents like these from ever happening again. Teams are working tirelessly, advancing and testing the software, conducting non-advocate reviews, and engaging regulators and customers worldwide as we proceed to final certification.”

Boeing added that cutting production to 42 planes per month would allow it to put more resources towards the software-certification process, without affecting the jobs of workers on the 737 program. Boeing CEO Dennis Muilenberg flew in a demo 737 Max flight using the new software last week.

The company has also developed new pilot training courses and education material for airlines. Pilots have said they were unaware of the new MCAS features in the aircraft until the Lion Air crash.

Boeing has signed more than 5,000 orders for the plane, which is intended to be a game-changer for short-haul aviation. Vietnam budget airline VietJet Air doubled its order, to 200, less than two weeks before the second crash. Last year, the Max, which has a list price of $122 million for the Max 8 model, made up about a third of Boeing’s 806 commercial plane deliveries (and about half of deliveries in the fourth quarter). Commercial planes contributed more than $60 billion to Boeing’s more than $100 billion in revenue in 2018.

Boeing paused deliveries of the Max after the crash in Ethiopia. The model accounts for about 80% of its unfilled orders.

Indonesia’s Lion Air is considering canceling its $22 billion order for Max jets and switching to Airbus. After the Ethiopian tragedy, Indonesia’s national airline, Garuda, wrote to Boeing on March 14 seeking to cancel its order for 49 Max jets, and potentially switch to another Boeing aircraft. “The crucial point is that [the] passenger in Indonesia has lost their trust to fly with Max 8,” Garuda spokesman Ikhsan Rosan said in an emailed statement.

In addition to the potential of lost revenue from canceled orders, a number of lawsuits have been filed against Boeing in US courts. The increasing focus on the plane’s design makes it more likely that a suit could be heard in the US, even though the crashes occurred overseas.

These are the airlines and leasing companies with the biggest outstanding orders for the Max: