Boeing Company CEO Dennis Muilenburg is apologizing after two deadly 737 MAX plane crashes. Muilenburg says Boeing has teams of experts “working tirelessly” to prevent anymore accidents.
Boeing said that it will slow the production of its prized 737 jet as it works on the software update that it says will prevent the “erroneous activation” of a plane maneuvering system that contributed to two plane crashes that killed nearly 350 people.
In the wake of the jets being grounded worldwide following the crash of Ethiopian Flight 302 last month, Boeing will cut 737 production to 42 from 52 jets per month, beginning in mid-April, the aviation company said. But there will be no layoffs as a result of the reduced schedule.
The company’s chairman Dennis Muilenburg said Thursday for the first time that the mistakenly activated system contributed to both fatal accidents, including the crash of a Lion Air flight in October in Indonesia that killed all 189 on board. He apologized via video to the loved ones of the victims.
“We have the responsibility to eliminate this risk, and we know how to do it,” the company said in a statement Friday. “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.”
A preliminary report, issued Thursday, said the crew of the Ethiopian Airlines jet that crashed last month, killing all 157 people aboard, performed all procedures recommended by Boeing but could not gain control of the doomed aircraft.
Though “a chain of events’’ led to the accidents, Boeing said in its statement Friday that “a common chain link’’ was the activation of the plane’s Maneuvering Characteristics Augmentation System, known as MCAS.
The 737 Max, the most recent iteration of Boeing’s 737 jet had become the company’s most coveted plane, and the most significant segment of its production and delivery schedule.
If the slow down is short lived, Boeing could make up ground financially later in the year, says Richard Aboulafia, an aviation analyst with the Teal Group.
Meanwhile he doubts that “airlines will feel much of an impact … They will continue to lease aircraft instead.”
But travel industry analyst Henry Harteveldt thinks the future for Boeing and the airlines who were buying the MAX may be more ominous.
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“Besides fixing the 737 MAX’s software problems, and getting the fix certified by the FAA and other safety authorities, Boeing has to assure airlines that have ordered the 737 MAX that it is still a good aircraft,” he says, noting that those carriers may lose revenue if they have to substitute smaller less fuel-efficient jets for the MAX planes.
“But Boeing’s biggest challenge… is regaining the confidence of the traveling public and the general public,” Harteveldt says. “For perhaps the first time in its history, Boeing’s name is now stained.”
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