MAX: Grounded, confounded

The Boeing 737 MAX crisis is without equal. Not since April 1954 and the de Havilland DH.106 Comet has a commercial airliner been grounded for such a substantial length of time. Back then, the Comet had ushered in the jet age less than two years earlier. Sixty years later, the aviation world has changed beyond recognition, yet parallels remain. Martin Needham considers Boeing’s annus horribilis as it battles to return the 737 MAX to service and the company to stability.

More than 250 airliners are currently stored at Grant County International Airport, Washington.
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The loss of two Boeing 737 MAX 8s five months apart, triggering the longest grounding of a jet airliner in seven decades, has thrown the world’s biggest aircraft manufacturer into crisis. Almost 800 aircraft are in storage, and lawsuits are piling up as Boeing’s supply chain makes thousands of employees redundant and analysts forecast losses in the region of $18bn. The fallout isn’t just limited to one of the most respected names in aviation. It af ects suppliers, carriers, lessors and even competitors.

Boeing had intended the Next Generation 737 (737 NG) to be the type’s final update. Of ered with an improved variant of the CFM56, it made its first flight on February 9, 1997, and entered service with Southwest Airlines that December. Eight years later, while its Renton production line continued to pump out 737 NGs, Boeing began developing a trio of clean-sheet designs as successors to the 737 and 757, 767 and 777-200ER, and 747 and 777-300ER respectively. The three airliners came under the Project Yellowstone umbrella as Y1, Y2 and Y3. While the latter two have since become the 787 Dreamliner and 777X, Y1 development slowed owing to a lack of powerplant options and all available resources being swallowed up by the issue-prone 787. It was postponed until 2011. Airbus launched the A320neo on December 1, 2010.

Southwest Airlines is the type’s largest customer, holding commitments for 280 examples.
AirTeamImages.com/John Kilmer

The New York Times has since reported that, in a January 2011 meeting, then Boeing Commercial Airplanes chief executive Jim Albaugh told employees that Airbus would probably go over budget creating a plane that carriers didn’t really want. Albaugh believed Boeing could wait until the end of the decade to produce a new aircraft from scratch. Five months later, at that year’s International Paris Air Show, Airbus recorded 667 commitments for the A320neo Family, worth $60.9bn at list prices. By the time the Le Bourget show closed, the single-aisle jet had chalked up 1,029 orders since its launch eight months earlier, making it the fastestselling airliner in history.

Among the show’s deals, American Airlines placed only its second order with the European manufacturer and its first for almost a quarter-of-a-century. The acquisition, comprising 260 A320 Family jets including the NEO, was a rude awakening for Boeing. Within 48 hours, the company’s then-President and CEO, James McNerney, greenlit a re-engined 737 and the Y1 was abandoned.

The entire Southwest Airlines MAX fleet, totalling 34 examples, has been stored at Southern California Logistics Airport.
AirTeamImages.com/Colin Parker

Months behind their European counterparts, it was all hands to the pump for the US aerospace giant, which had promised American Airlines an updated 737 variant would be ready in six years. Keen to beat Airbus, the new jet’s maiden flight came on January 29, 2016 – less than five years after giving assurances to American Airlines, but almost 18 months after the A320neo.

Speaking to The New York Times, Rick Ludtke, an engineer who’d spent 19 years with the company and worked on the design of the MAX cockpit, said the company had told staff to limit changes to avoid the need for pilots to train in simulators before flying the new jet. He explained: “The company was trying to avoid costs and trying to contain the level of change. They wanted the minimum change to simplify the training differences, minimum change to reduce costs, and to get it done quickly.”

Another former Boeing engineer, Adam Dickson, concurred, telling the BBC: “The culture was very cost centred, incredibly pressurised… The goal was to show that those differences were so similar to the previous design that it would not require a major design classification in the certification process.”

Responding to the BBC, Boeing denied the claims, saying: “We did not cut corners or push the 737 MAX out before it was ready.”

International Consolidated Airlines Group’s (IAG) Letter of Intent for 200 737 MAX jets accounted for almost 70% of Boeing’s commercial airliner sales at the 2019 Paris Air Show.
AirTeamImages.com/MATT7X

Grounding order

Ahead of receiving its first aircraft, Indonesian carrier Lion Air had been creating a training syllabus when it and Indonesia’s Directorate General of Civil Aviation asked Boeing whether tuition beyond computer-based training, including simulator time, was necessary. Responding to the query, a Boeing employee stated that: “There is absolutely no reason [for] your pilots to require a MAX simulator to begin flying the MAX. Once the engines are started, there is only one dif erence between NG and MAX procedurally, and that is that there is no OFF position of the gear handle. Boeing does not understand what is to be gained by a three-hour simulator session, when the procedures are essentially the same.”

On October 29, 2018, one of Lion Air’s 737 MAX 8s, PK-LQP (c/n 43000), departed Jakarta/Soekarno Hatta bound for Pangkal Pinang/Depati Amir. During a 12-minute flight, the crew reported a “flight control problem” and struggled to reach and maintain an altitude of 5,000ft – the aircraft twice descending at rates of up to 3,750ft per minute. In the last seven minutes of the flight, the Manoeuvring Characteristics Augmentation System (MCAS) activated on 25 occasions before the aircraft disappeared from radar. All 181 passengers and eight crew on board were killed.

Spirit Aerosystems – one of Boeing’s biggest suppliers – receives more than 50% of its revenue from the 737 MAX programme. It produces a range of components, including fuselage barrels, engine nacelles, thrust reversers and wing leading edges.
William Campbell/Getty Images

In its investigation, Indonesia’s Komite Nasional Keselamatan Transportasi (KNKT) found that: “The lack of MCAS information in the FCOM [flight crew operations manual] and flight crew training resulted in it being more dif icult for the flight crew to diagnose the problem and find the corrective procedure to solve it. Without prior awareness of the MCAS function, it would be more dif icult for the flight crew to understand the problem. It would take them longer time to understand the situation and come to the correct solution, putting them at a higher risk than necessary.”

Most pilots were unaware that MCAS existed until after the crash of Lion Air flight 610, more than a year after the carrier had placed the type in service. While concerns regarding the airliner’s safety grew, it remained in service and Boeing continued to deliver jets – eyeing an increase in production to 57 units a month during 2020.

That all changed on March 10, 2019. In similar circumstances to the earlier Lion Air crash, an Ethiopian Airlines example crashed shortly after departure from Addis Ababa/Bole with the loss of all 157 on board. The carrier grounded its remaining five jets with immediate ef ect and has since stated that it will be the last airline to return the MAX to service.

Efforts to rectify issues with the Boeing 737 MAX has meant the company has further delayed a potential launch for its New Midsize Airplane. Meanwhile, Airbus has recorded almost 500 orders for its A321XLR of ering since June.
Airbus

The Civil Aviation Administration of China – a regulatory body almost built by the FAA in its own image following the loss of two Chinese airliners within four weeks during 2002 – was first to call on carriers to stop using the MAX. It issued a notice at 9am on March 11 requiring domestic airlines to suspend the commercial operations of Boeing 737-8 aircraft by 6pm that evening.

A raft of other safety agencies followed suit over the next 24 hours, however the FAA permitted the jet’s continued use until, on March 13, the agency bowed to mounting pressure from fellow regulators, airlines and US President Donald Trump.

Following the FAA’s decision to ground the airliner globally, Boeing remained confident that a recertification effort would be completed within several months. On May 16, the company stated in a press release that it had “completed development of the updated software for the 737 MAX, along with associated simulator testing and the company’s engineering test flight”.

Boeing also advised it had “flown the 737 MAX with updated MCAS software for more than 360 hours on 207 flights” Bookended between the Ethiopian Airlines crash and the FAA’s decision to ground the MAX, the 777-9 roll-out was a damp squib, and set the tone for the 737-10’s unveiling later in the year.

Air Canada has ferried 22 examples from its 24-strong fleet to Pinal Air Park, Arizona, for storage.
AirTeamImages.com/Colin Parker

Paris and Dubai

Three months after its best-selling jet had been grounded indefinitely, Boeing made a bashful appearance at the Paris Air Show. The event’s opening day was a tale of two contrasting fortunes. While Airbus launched its show-stealing A321XLR with a host of orders, Kevin McAllister, then chief executive of Boeing Commercial Airplanes, opened the show with a conciliatory message acknowledging and apologising for past failings. The European aerospace giant’s longest-range, single-aisle offering would close the show with 243 commitments.

Boeing’s saving grace was a letter of intent (LOI) from International Consolidated Airlines Group (IAG) for 200 737 MAX 8s and 10s. It was the type’s only trade at the event – accounting for almost 70% of the company’s airliner orders. Airbus chief commercial officer Christian Scherer stated that no formal tender had been issued prior to the LOI’s surprise announcement, adding that Airbus “would like a chance to compete for that business”.

Eight months later, Le Bourget’s blockbuster Boeing order has yet to be firmed. Speaking less than a month after putting pen to paper on the deal, IAG chief executive Willie Walsh said the LOI “should be an indication not just to Airbus but to everybody that we’re unhappy with their performance… I know everybody interprets it as an issue of price, it’s not.” Walsh stated that he intends to sign off on the $24bn deal, explaining he doesn’t want to be “solely dependent” on a single manufacturer for IAG’s narrow body fleet, especially given Airbus has been struggling to deliver A320 Family aircraft on time. However, with Walsh retiring at the end of June, we will discover if the Irishman stands by his LOI.

Some airliners have been in storage at Boeing Field for almost 12 months. Among them are jets intended for carriers that have since cancelled their planned leases or, in the case of Jet Airways, have gone out of business.
Huy Do/AvStock

The US manufacturer appeared to have turned a corner by November’s Dubai Airshow. New Boeing Commercial Airplanes CEO Stan Deal may have begun the show by delivering a similarly sombre message to that of his predecessor at Le Bourget, but the event ended on a more positive note.

While the 737 MAX wasn’t present as efforts to recertificate the jet rumbled on – although two flydubai examples are stored at the Al Maktoum site – it racked up its first major firm order since the FAA issued its grounding order back in March. SunExpress exercised ten options for the type, while Kazakhstan’s FlyArystan signed a LOI for 30 examples. Further relief came for the airframer when an undisclosed customer agreed to take 20 MAX 8s.

Trouble at mill

The first hint that Boeing might put its MAX production line on hold came on July 25 in the manufacturer’s third quarter results conference call, which also involved the company posting a quarterly loss of $3.4bn – its biggest ever.

Confident that the single-aisle jet would be back flying by October, then Boeing president and CEO Dennis Muilenburg said: “As our efforts to support the 737 MAX’s safe return to service continue, we will continue to assess our production plans… Should our estimate of the anticipated return to service change, we might need to consider possible further rate reductions or other options, including a temporary shutdown of the Max production.”

Four months later, with 391 MAX jets stored at five locations across Washington and Texas, Boeing confirmed it would stop manufacturing the embattled type, stating: “We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected. As a result of this ongoing evaluation, we have decided to prioritise the delivery of stored aircraft and temporarily suspend production on the 737 programme.”

While more than 25 years have elapsed since an IAG carrier took delivery of a Boeing 737, a British Airwaysliveried MAX 8 was delivered to South African franchisee Comair in February 2019.
Huy Do/AvStock

This is the first time since autumn 1997 that Boeing has suspended 737 production. Two years earlier, John Leahy began his new role as Airbus CCO with a pledge to increase the company’s market share from 16% to 50% within five years. Aiming to stop Leahy in his tracks, Ron Woodard, then president of Boeing Commercial Airplanes, cut prices and of ered faster delivery times, increasing production from 21 to an unprecedented 27 units a month. The move overstressed Boeing’s supply chain which couldn’t keep up with the increase in pace. Boeing posted an annual loss of $178m – its first since 1959.

On December 23 – a week after the company confirmed its 737 line would be stopped – Boeing released another statement, advising that Dennis Muilenburg had resigned as CEO and board director with immediate effect.

While Boeing has reassured employees that no redundancies will be made, with staf being redeployed to other parts of the business, there was – and still is – no indication of when the final assembly line will reopen. Those further down the supply chain face a more uncertain future. Spirit Aerosystems, which produces fuselage barrels, engine nacelles, thrust reversers and wing leading edges for the programme, has already laid of 2,800 employees. The Wichita, Kansas-based company stated in a December 20 press release that its income from 737 aircraft components “represents more than 50% of [its] annual revenue”.

With the Federal Aviation Administration issuing its grounding of the 737 MAX a fortnight before the start of the summer schedules in Europe, airlines scrambled to shore up capacity. Turkish carrier Corendon Airlines leased in Wamos Air 747-400s to ensure connections operated as usual.
AirTeamImages.com/Jan Ostrowski

As a new decade began, problems continued to arise. First concerning wiring looms which could potentially cause a “catastrophic” short circuit, before details of additional software issues. The news was met with Southwest Airlines following United Airlines and American Airlines in pulling the jet from its schedules until early June. Dallas Fort Worth-based American’s decision means that the carrier has cancelled around 63,000 flights until June 4 – a loss of 10.7m seats since March 14, 2019.

With the suspending of production signalling a change of strategy, Boeing may encounter additional problems once the MAX returns to service. European airlines were due to take delivery of 146 737 MAX jets during 2019. However, with the company unable to hand over its single-aisle airliner, there are fears that carriers will face a worsening of the current supply and demand imbalance as Boeing tries to clear its delivery backlog, creating overcapacity. It is likely that Boeing will continue to be beset with requests from airlines wanting to reschedule the acceptance of new aircraft.

The third Boeing 737 MAX 8 built, N8703J (c/n 42556), seen during its time as a test airframe. It is due to be delivered to Southwest Airlines once the type has been recertificated.
AirTeamImages.com/John Kilmer

There are also complications arising from Boeing’s U-turn on training requirements. The company affirmed its position in a January 7 press release, stating it is “recommending 737 MAX simulator training in addition to computerbased training for all MAX pilots prior to return to service of the 737 MAX.” While almost 400 jets were in service prior to the Ethiopian Airlines crash on March 10, 2019, at the time of going to press there were just 34 simulators for the type. With an airline averaging around five crews per aircraft, there is a potential need for up to 4,200 captains and first officers to undertake simulator training before they can return to MAX flight decks.

The manufacturer stated its advice “takes into account our unstinting commitment to the safe return of service as well as changes to the airplane and test results. Final determination will be established by the regulators”.

Boeing had continued to manufacture 42 737s a month following the MAX’s removal from service, but announced in December it would close the production line from mid-January.
AvStock/Huy Do

With almost 800 single-aisle aircraft due to be cleared to enter revenue service when the grounding order is lifted, a knock-on effect is likely to be felt by other sectors within the aviation industry. Maintenance, repair and overhaul (MRO) providers have benefited from the MAX grounding thus far, due to increased demand placed on the existing 737 NG fleet as airlines are retaining and/or leasing older variants to shore up capacity.

However, with 387 jets having been pulled from service and Boeing eager to hand over a further 400 delivery-ready examples, airlines are expected to retire ageing jets in favour of the MAX and may do so at an unprecedented rate. A keenness to dispense with older, less economical types could trigger a faster phasing out of 737 NGs and a flood of spare parts onto the market.

The latest member of the Boeing 737 family, the MAX 10, was unveiled on November 22. It is unlikely to begin flight testing until the grounding order has been rescinded.
Boeing

Identity crisis

That only four airlines have cancelled their orders since the March grounding could be considered testament to the aviation industry’s trust in Boeing. However, with the A320neo Family backlog currently hovering around the 6,500 mark during January, there are precious few alternatives available.

While many carriers haven’t voted with their feet, an increasing number are mindful of the connotations surrounding the MAX name. Boeing may have rebuffed calls from US President Donald Trump, Kenya Airways chief executive Sebastian Mikosz and Qatar Airways Group CEO Akbar Al Baker to rebrand the embattled airliner, but that hasn’t stopped the aerospace giant’s customers doing it for them.

The liveries applied to a row of stored jets at Grant County International Airport in Washington highlights the grounding’s global impact.
David Ryder/Getty Images

In confirming its letter of intent (LOI) for up to 200 examples, International Consolidated Airlines Group (IAG) chose to refer to the airliner as “737-8s” and “737-10s” Similarly, VietJet Air, which has firm orders for 200 examples, has also dropped MAX titling from its livery. However, it is Ryanair – one of Boeing’s biggest and most loyal customers – which has been most aggressive in distancing itself from the MAX name. In July, it internally rebranded its 737 MAX 200s as 737-8200s, before disclosing in December that passengers will not be told whether they are due to fly on a MAX before booking.

Many are likely to view the ongoing grounding as beneficial to Airbus, however, it is almost certain to have an adverse ef ect on the European aerospace giant as the ongoing trade war between the US and Europe is likely to reach a crescendo later this year. In October, the US was given the right to impose tarif s of up to 100% on Airbus jets – overnight, 10% was slapped on European-built aircraft, with US President, Donald Trump considering an increase to 25%.

Unable to deliver its new airliners, Boeing’s backlog quickly spilled over into staff car parks.
Huy Do/AvStock

This is not helped by the European Union’s (EU) request for more than 1.5m pages of documentation on more than 20 years of sales campaigns, which has delayed its decision to approve or reject the proposed joint venture between Boeing and Embraer. Acceptance of the tie-up had been expected by the end of 2019, but the EU has twice extended the deadline by which it is to provide a verdict. A decision is now expected either on or before April 30.

The MAX is still expected to return to commercial service sooner rather than later. However, it will take far longer for Boeing’s financial and reputational wounds to heal. Across the pond, the A321LR and XLR are stealing a march in the race to replace the 757 against Boeing’s New Midsize Airplane, which is still stuck on the drawing board. The damage done could hinder the US manufacturer’s ability to develop clean-sheet of erings in future and cost the company decades. With ten years of transatlantic political mudslinging set to reach a crescendo, it’s becoming increasingly evident that this is a loselose situation for all involved.

China is among the nations most af ected – a dozen of its carriers have withdrawn aircraft from service, while 16 airlines are awaiting MAX deliveries.
AirTeamImages.com/Dipankar Bhakta