Capitol Hill needs to ensure that the FAA does not make things worse as Muilenburg nails his colours to the mast

Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg reports that the board of directors today declared a regular quarterly dividend of two dollars and five and one-half cents ($2.055) per share. At the same shareholder meeting, the shareholders, two thirds at least, backed the board and Muilenburg’s position as dual head of Boeing.

Muilenburg then went a dropped a serious PR clanger by seemingly indicating that the MAX crashes were due to a “chain of events” including some procedures not being completely followed by pilots. Blaming pilots in public is not a great idea as others have done in the past to their detriment. Indeed any blame attributed to pilots has profound ramifications for insurance liability and any legal proceedings that may or may not be in the pipeline. As such Muilenburg must think that Boeing is on safe ground.

During Boeing’s Q1 earnings call, Muilenburg stated that while he cannot divulge details of the deep accident investigation report, he says with confidence that “both accidents were a series of events…what we know is that in this case, there was erroneous angle of attack information that came into the airplane from multiple causes. We know that at some point during the flight, that activated the MCAS control loss. And we know that ultimately, there were actions or actions not taken that contributed to the final outcome”. He maintains that this was not due to a technical slip or an unknown that slipped through the certification process. Also during the call, he detailed steps Boeing has laid out to rebuild confidence in the aircraft type, where pilots play a key role. “More than 90% of our 50-plus MAX operators to-date have had pilots in our simulator sessions with the new software, experiencing that, building confidence. I can tell you with those series of sessions that we've had around the world, the pilot feedback from the simulator sessions has been excellent, and I think it's been a big part of building confidence and how we talk about this going forward. So we're planning to leverage that pilot voice,” says Muilenburg.

Meanwhile, for Boeing and airlines that own MAX aircraft there is the matter of recertification. One stepping stone may be the required pilot training simulations. The Allied Pilots Association (APA), which represents American Airlines pilots, has commented that Boeing's draft 737 MAX training proposals only include additional computer-based training to understand the anti-stall system, rather than full motion simulators. The APA says that computer training “will not provide a level of confidence for pilots to feel not only comfortable flying the aircraft but also relaying that confidence to the traveling public”.

Boeing was contacted for clarification on this point but had not responded at the time of publication.

For now, it seems that the FAA is resolved on approving Boeing’s pilot training update for the MAX that requires little more than sitting down with a tablet. Will China, EASA and moreover pilot unions really go for that? How will that look when it hits news agencies across the globe? There is a growing call for MAX pilot training updates to be carried out via mandatory full motion simulator hours. If this is heeded, it will impact Boeing’s hopeful timeline for getting the MAX into the air again by July as by our count there are 19 active MAX simulators in the world right now. They are going to be a prime commodity this summer as over 4,500 pilots will have to be scheduled for training.

This brings us back to what we stated here when China and other jurisdictions grounded the aircraft after the Ethiopian crash, the FAA delayed a grounding decision and were shown in a poor light. Now, the converse situation is possible: If the FAA approves a speedy recertification, it is highly likely that China, Europe, Canada and others will disagree and US airlines will be put in a real bind. Do they follow the FAA and risk a PR backlash or do they ignore the FAA and instead put their faith in EASA or the like? That would totally discredit the FAA for a significant period and may lead to the erosion of the FAA’s pre-eminence on the global stage. It is about time Capitol Hill did both US airlines and Boeing a favour and stepped-in to ensure that the FAA does not dig the MAX into an even deeper hole than it is currently in.

As for Boeing shares; they still have some way to track down yet before any recovery and the cessation of the share buyback scheme in the wake of all this will not help underpin confidence. We know now for sure that Boeing needs to hoard its cash in the short term due to this situation.