Boeing 737 Max8 Crashes

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Jun

Re: Boeing 737 Max8 Crashes

Post by Jun »

Gaybutton wrote: Sun Jun 30, 2019 12:00 am Before I step in and insist the topic remain about the 737 Max8 problems, perhaps somebody can convince me that talking about outsourcing to India and education in Vietnam has anything to do with with the 737 Max8 situation.

Do I hear, "Start a new topic" . . . ?
Point taken. Outsourcing to India was raised as one of the possible contributors to low quality on the 737, but you are right to point out there is considerable drift in the topic.

Ultimately Boeing should ensure their product is robustly engineered at least in line with normal practices and then respond quickly if problems occur.
They appear to have failed on both points.
fountainhall

Re: Boeing 737 Max8 Crashes

Post by fountainhall »

Boeing's results are not announced until next week but it has just announced a $4.9 billion hit as a result of its 737 Max problems. This is the amount it expects to pay to airlines for the grounding and delivery delays. It does not take into account the lawsuits by those killed in its two crashes. Boeing also stated this is a "best estimate" at this time.

Interestingly, after many statements in recent months to the effect that the faults in the aircraft have been identified and fixes ready,
Boeing said it continues to work with aviation authorities to get the 737 Max back into the air, which it hopes will be in the fourth quarter of 2019.
Hopes? But it immediately qualified that "hope" with
"This assumption reflects the company's best estimate at this time, but actual timing of return to service could differ from this estimate."
The FAA is less optimistic.
in a speech on Thursday, the US transportation secretary appeared less certain that the aircraft would be cleared to fly again this year.

Elaine L Chao said the Federal Aviation Administration, "is following a thorough process, rather than a prescribed timeline... the FAA will lift the aircraft's prohibition order when it is deemed safe to do so."
Even with these statements, the stock price rose 2% in after-hours trading.

What concerns me is that after the raft of positive statements from Boeing between late March and June about how the fix was ready and the Max would be back in the air in a matter of weeks, everything about the plane has suddenly gone quiet. Has the company discovered yet more unseen faults, like the one that surfaced last month and which had never before been noticed?

https://www.bbc.com/news/business-49026285
fountainhall

Re: Boeing 737 Max8 Crashes

Post by fountainhall »

Despite Boeing's estimate of $4.9 billion, Deutsche Welle News Service increases Boeing's figure to $6.7 billion as a result of the reduced production rate of the aircraft. Today''s New York Times ups that to a hit of $8 billion.

The Aviation Consultancy IBA Group estimates that the cost of grounding each 737 Max aircraft is $150,000 per day. With 387 grounded planes, and 128 days of grounding so far, that equates to much closer to the New York Times figure at $8.6 billion. Airlines may be able to make some savings as a result of using some older aircraft But the Max was supposed to save 15% in fuel burn. Given the many thousands of flight cancellations monthly, the use of some older aircraft and the extra fuel costs, the savings will not have much effect on that $150,000 figure.

Of more concern to Boeing and its shareholders is that the grounding will almost certainly last until November and possibly 2020. That will effectively more than double Boeing's losses to a much more worrying $16+ billion. And then there are the family lawsuits to factor on top.

I certainly would not be buying Boeing shares for some considerable time.

https://www.dw.com/en/boeing-warns-of-s ... a-49643183
https://www.iba.aero/insight/the-direct ... 8-9-fleet/
firecat69

Re: Boeing 737 Max8 Crashes

Post by firecat69 »

fountainhall wrote: Fri Jul 19, 2019 11:26 am I certainly would not be buying Boeing shares for some considerable time.
I thought the same thing, but it is remarkable to me that with no good news Boeing stock price has stabilized in a very narrow range and in fact after the first Lion Air Crash the stock has suffered about a 15% decrease and in fact over the last 12 weeks with nothing but bad news, the stock price has increased 12%. I guess the old adage of buying on bad news may still work.
fountainhall

Re: Boeing 737 Max8 Crashes

Post by fountainhall »

What was not mentioned in last week’s announcement is that Boeing must be hemorrhaging cash. It had planned to produce around 52 737 Max aircraft a month. Although it has reduced production and is paying for and now churning out 42 a month, it is not getting any revenue for them. The airlines due to receive them will have paid deposits (I understand that’s around 1% of the agreed price) and part of the staggered payments thereafter. But all that revenue will have stopped with the grounding. And with the grounding now unlikely to be lifted until November at the very earliest or January being more likely, that’s zero revenues on between 400 and 500 aircraft. I wonder how much that might amount to.
Jun

Re: Boeing 737 Max8 Crashes

Post by Jun »

fountainhall wrote: Mon Jul 22, 2019 9:56 pm that’s zero revenues on between 400 and 500 aircraft. I wonder how much that might amount to.
For speculation, shall we try: 400 x listed price x our estimate of discount ?

Let's assume the are all Max8, as the discount is a huge approximation in any case:

400 x $121million x 50% = $24.2 billion of revenue which might be delayed ?

This might be a long long way out, but since I'm not interested in purchasing Boeing stock at the current price, there is no point in doing further research.

http://www.boeing.com/company/about-bca/#/prices
firecat69

Re: Boeing 737 Max8 Crashes

Post by firecat69 »

Well let's see what this massive loss does to the stock price?

https://finance.yahoo.com/news/boeing-p ... 59063.html
fountainhall

Re: Boeing 737 Max8 Crashes

Post by fountainhall »

Fitch and Moody's have warned that their credit ratings for Boeing are at risk. Both agencies have stated that the extended worldwide grounding has driven up Boeing's costs and is hurting cash flow. Moody's has warned that Boeing must cut the reduced production rate of 42 aircraft per month to conserve working capital if the grounding is extended into 2020.

https://www.cnbc.com/2019/07/22/boeing- ... 7-max.html

Consumer advocate Ralph Nader has again gone public stating that Boeing must scrap the 737 Max and it must never fly again.
The plane cannot be refixed,” said Nader, whose grandniece was killed in a March crash of a 737 Max jet in Ethiopia. “It has to be recalled” and permanently taken out of service, he said . . . On the software fix, Nader said it shouldn’t be trusted since executives are “stuck in their bad decision” and are “ignoring preventable aerodynamic design.”
https://www.cnbc.com/2019/07/22/boeing- ... 7-max.html
fountainhall

Re: Boeing 737 Max8 Crashes

Post by fountainhall »

Boeing's woes just continue! Southwest Airlines, the biggest operator of the 737 Max, has now put back the date of a possible reentry into service to 5 January 2020. The reason? This follows "our most recent advice from Boeing." So what do Boeing and Southwest know that the rest of the world does not yet know, I wonder.
gera

Re: Boeing 737 Max8 Crashes

Post by gera »

As U.S. government test pilots ran through dozens of flight scenarios on the Boeing Co. 737 Max in recent weeks, a potential failure got their attention.

The plane’s flight computer tried to push the aircraft’s nose down repeatedly during a simulator run, prompted by a stream of erroneous flight data. The Federal Aviation Administration pilot concluded commercial pilots might not have time to react and avoid a tragedy in a real plane.

That flaw -- the latest discovered on the family of jets involved in two fatal crashes since October triggered by a different failure that pushed their noses down -- was revealed by FAA last month. It threw new uncertainty on the return to flight of the Chicago-based company’s best-selling model and sent its engineers scrambling for a fix.


Interviews with people familiar with the failure suggest it triggered multiple, aggressive movements to lower the plane’s nose, which alarmed the FAA pilots and other officials. However, the nose-down motion didn’t occur as a result of a computer hardware fault, according to one of the people, who asked not to be named because he wasn’t authorized to speak about the matter.

That would add credibility to Boeing’s assertions that it can fix the issue with a relatively simple software change.

Read more: When Will Boeing 737 Max Fly Again and More Questions

“We are confident that is a software update, not a hardware update,” Boeing Chief Executive Officer Dennis Muilenburg said during an earnings call on Wednesday. “It’s an understood update and we’re in the middle of working our way through that.”

Day One Of The 53rd International Paris Air Show
Dennis MuilenburgPhotographer: Jasper Juinen/Bloomberg
Muilenburg said the company expects it can complete a software patch by the end of September, while cautioning that the timeline remains uncertain. The FAA, which must sign off on any fix in the glaring spotlight of the 737 Max investigations, hasn’t set a deadline or agreed with Boeing’s assessment that software changes alone will suffice.


The agency has declined to comment on the situation beyond a statement it issued June 26 saying the flaw was discovered during the routine process to test the aircraft. “The FAA recently found a potential risk that Boeing must mitigate,” the agency said in its statement without describing the details.

Two people briefed on the flight test shared more details of the failure than were released when it was revealed.

Latest: U.S. NTSB to Issue Recommendations on 737 Max Certification

In the fault, a wing at the tail of the Boeing jet known as the horizontal stabilizer was rotating in a way that lowered the nose, according to both people. That same scenario occurred during fatal accidents off the coast of Indonesia and in Ethiopia when a safety feature known as Maneuvering Characteristics Augmentation System activated during a malfunction.

However, the newly discovered problem wasn’t triggered by MCAS, said one of the people.

It was prompted instead by multiple erroneous data streams in a flight computer that occurred simultaneously, the person said. It was simulated in tests even though it has never been documented to have occurred during flight, the people said. Anticipating every possible outcome of even the most unlikely failures is part of how safety assessments are conducted during certification.

The failure scenario was known previously and had been assessed in a safety analysis when the plane was certified before entering service in 2017. At that time, Boeing concluded that pilots could overcome the nose-down movement by performing a procedure to shut off the motor driving the stabilizer movement.

Fight for Survival on Doomed Jet Came Down to Two Cockpit Wheels


Projecting that pilots would mitigate a hazard from a malfunction is common on jetliners, but that was part of the reason that FAA approved MCAS initially, a now-controversial decision that is being reviewed by Congress and other outside panels. Even though it was possible for pilots in both fatal crashes to have counteracted MCAS, the crews were unable to do so.

When the newly discovered computer failure began trimming the nose down in the recent test, it was more difficult than expected for test pilots to counteract, according to the other person briefed on the tests, who also asked not to be identified.

The second person wasn’t able to confirm that faulty data streams triggered the nose-down movements.

One of the ways pilots are taught to respond to a so-called “trim runaway,” which is what the computer issue prompted, is to activate switches on the control column that move the horizontal stabilizer. Doing so can counteract the malfunction, even if only temporarily, so that pilots have more time to perform other emergency actions.

Using the trim switches to halt the horizontal stabilizer movement proved difficult, though test pilots were able to respond to the failure and maintain control. As a result, they concluded that a typical pilot might not be able to respond adequately, the people said.

Because the fault was triggered by specific streams of erroneous flight data, a new software patch can be devised that monitors the computer for that highly unusual condition and prevents movement of the stabilizer when it occurs, one of the people said.

The 737 Max family of aircraft has been grounded by the U.S. since March 13 and has cost Boeing and airlines billions of dollars. Boeing announced July 18 that it was reducing revenue and pre-tax earnings by $5.6 billion in the second quarter of this year.

American Airlines Group Inc. predicted Thursday that it would take a $400 million hit on profit this year due to the plane’s woes and Southwest Airlines Co. said it wouldn’t add the 737 Max back to its schedule until early next year.
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