Two crashes within five months -- Lion Air Flight 610 in October off the coast of Indonesia and Ethiopian Airlines Flight 302 in March outside Addis Ababa -- killed 346 people and led to a global grounding of Boeing Co.’s relatively new 737 Max jets, the fourth generation of a venerable brand first flown in 1967. Numerous investigations are under way, including ones looking at how U.S. flight regulators came to certify the airplane. Boeing has abandoned its financial forecast for 2019 as it faces questions about the plane’s development and testing and its own transparency.

1. Will the 737 Max fly again?

The U.S. Federal Aviation Administration has said there’s no time frame for signing off on a proposed software fix that Boeing says will address what went wrong in both crashes, along with revised pilot training,. An FAA official said on June 13 that he expects the plane to be back in service this year. Southwest Airlines and American Airlines, two of the biggest users of the 737 Max, have pulled the plane from their schedules through early September.

2. Will travelers be willing to fly on the 737 Max?

At least 20% of U.S. travelers say they will definitely avoid the plane in the first six months after flights resume, according to a study led by consultant Henry Harteveldt. More than 40% said they’d be willing to take pricier or less convenient flights to stay off the Max. A UBS Group AG survey found that 70% would hesitate today to book a flight on the Max. American Airlines says its executives and other staff will take the first flights, before paying passengers, as soon as the Max is certified fit to fly -- a move meant to build public confidence.

3. How disruptive have the groundings been?


Not very, since there are many more Max jets in production than had been in service. In the U.S., for example, the Max makes up about 3% of the mainline fleet. Southwest, the biggest U.S. operator, said the grounding was causing about 130 daily cancellations. Airlines have used other planes in their fleet or leased aircraft. Most travelers have suffered little disruption.

4. Which airlines were using the 737 Max?

The main operators include Southwest (31 in the fleet through May 31), American (24) and Air Canada (24). Chinese airlines account for about 20% of 737 Max deliveries globally. (Click here for the full list.) As of the end of May, Chicago-based Boeing reported 387 deliveries of the single-aisle Max jets to 48 airlines or leasing companies, with orders from around 80 operators for about 4,550 more. Most sales are the Max 8, the model involved in both crashes. (There’s also, from smallest to biggest, a Max 7, 9 and 10.)

5. What caused the crashes?

In both cases, pilots were overwhelmed by an obscure new flight control feature added to the Max known as the Maneuvering Characteristics Augmentation System, or MCAS. The system kicked on due to an erroneous sensor reading and started nudging the plane nose downward. Pilots commanding the doomed Ethiopian Air jet were hit with a cascade of malfunctions and alarms seconds after taking off from the Ethiopian capital, according to a preliminary report.


6. What’s the purpose of MCAS?

Boeing installed the software in the 737 Max to help the plane behave similarly to previous models under certain circumstances. The system activates when the plane appears to be at risk of stalling, a situation in which the wings are losing lift because the jet is climbing too steeply. (The use of new, bigger engines on the 737 Max required Boeing’s designers to mount the turbines farther forward on the wings to give them proper ground clearance. That changed the plane’s center of gravity.)

7. So what went wrong?

The software had a critical flaw: It relies on the reading from a single sensor called the angle of attack vane, which measures the nose of the plane against onrushing wind. Boeing said there was a simple procedure for shutting off MCAS in case of malfunction. The day before the Lion Air crash, an off-duty pilot on the same aircraft recognized the problem and told the crew how to disable the system, saving the plane.

8. Who approved this system?

The FAA gave final certification to the 737 Max in March 2017, and it entered commercial service two months later. Under its Organization Designation Authorization program, established in 2005, the FAA had delegated to Boeing the authority to perform some safety-certification work on its behalf. FAA employees warned as far back as seven years ago that Boeing had too much sway over safety approvals of new aircraft. Boeing said in May that it had known months before the Indonesia crash that the cockpit alert wasn’t working the way it had told buyers, but it did not share those findings with airlines or the FAA until after the Lion Air jet went down.

9. What has this meant for Boeing?

Boeing lost more than $38 billion, or 16%, of its market value in the three months after the second crash. In April, the company missed its quarterly earnings estimates for just the second time in five years. The entire 737 range accounts for almost one-third of Boeing’s operating profit, and Boeing has seen orders for the Max shrink. In addition, Norwegian Air said it will seek compensation for the grounding of about 1% of its seats, and there’s the prospect of substantial payouts to the families of passengers if Boeing is found responsible for the crashes. Boeing’s suppliers are feeling the impact as well. CFM International, a joint venture between General Electric Co. and Safran SA, cut output by about 5%, while Sanfran says it may lower its earnings forecast.

--With assistance from Alan Levin, Julie Johnsson and Paul Geitner.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Grant Clark, Laurence Arnold

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