Boeing Grapples With New Software Snag on 737 MAX

January 19, 2020 Updated: January 19, 2020
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Boeing said it is fixing a new software snag found last weekend during a technical review of the proposed update to the grounded Boeing 737 MAX.

“We are making necessary updates and working with the Federal Aviation Authority (FAA) on submission of this change, and keeping our customers and suppliers informed,” Boeing said in a statement. “Our highest priority is ensuring the 737 MAX is safe and meets all regulatory requirements before it returns to service.”

Company officials said the issue relates to a software power-up monitoring function that verifies some system monitors are operating correctly.

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A Boeing 737 Max aircraft is seen parked in a storage area at the company’s production facility in Renton, Washington, on Jan. 10, 2020. (Reuters/Lindsey Wasson)

Boeing has halted production of the 737 MAX this month following the grounding in March of its best-selling plane after two fatal crashes in five months killed 346 people.

The company has been in turmoil after the disasters, including bottom-line impacts.

Recently, the firm announced its commercial airplane operations lost orders in 2019, marking the first time in decades that the planemaker has taken this type of hit to its business.

Boeing released figures on Jan. 14 that showed a net loss of 87 plane orders—meaning that more orders were cancelled than were placed. The company also posted the lowest numbers for plane deliveries in 11 years, losing the top spot to European rival Airbus for the first time in eight years.

Still, Boeing ended 2019 with a commercial airplane backlog of 5,406 planes, representing years of future production.

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Airplane fuselages bound for Boeing’s 737 Max production facility sit in storage at their top supplier, Spirit AeroSystems Holdings Inc, in Wichita, Kansas, on Dec. 17, 2019. (Reuters/Nick Oxford/File Photo)

Analysts estimate that Boeing has been losing around $1 billion a month because of the grounding and the company reported an almost $3 billion negative free cash flow in the third quarter.

The aeronautics giant is due to report fourth-quarter earnings on Jan. 29 and said earlier it is considering raising more debt.

Credit Rating Agency Moody’s said it had placed Boeing’s A3 senior unsecured credit rating under review for a possible downgrade.

Industry-led 737 MAX Panel Defends Boeing

A Department of Transportation (DOT) panel reviewing the airworthiness certification process of the 737 Max in the wake of the deadly crashes found the procedures followed by the FAA and Boeing to be effective, but suggested areas for improvement.

An independent committee established by the Department of Transportation published a 68-page report on Jan. 16, in which it largely exonerated both the plane-maker and the agency responsible for designating aircraft as safe to fly.

“What we saw was a thorough work by aviation professionals,” said one of two co-chairs of the panel, former Air Line Pilots Association President Lee Moak, NPR reports. “However, we saw where you could improve the system.”

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FILE PHOTO: Boeing 737 Max fuselages are seen parked outside the company’s production facility in Renton, Washington, U.S. January 10, 2020. REUTERS/Lindsey Wasson/File Photo

The panel, composed of transportation industry executives and former regulators, recommended the FAA expand its risk management protocols from airlines and airports to include design and manufacturing organizations.

Other recommendations include better data management and smoother cooperation with aviation authorities in other countries.

‘Challenging Time’

As part of its ongoing crisis management efforts, Boeing last month replaced its CEO.

A Boeing 737 Max being built for Norwegian Air International taxis
A Boeing 737 Max being built for Norwegian Air International taxis for a test flight, at Renton Municipal Airport in Renton, Washington, on Dec. 11, 2019. (Ted S. Warren, /AP/File)

New Boeing chief Dave Calhoun was described by the company’s board as “the right leader to navigate Boeing through this challenging time in our 104-year legacy.”

In an email sent to Boeing employees, Calhoun noted the “painful” lessons of the past 18 months, vowing greater transparency and “holding ourselves accountable to the highest standards of safety and quality.”

The incoming CEO said returning the Max to service would be his key objective.

“This must be our primary focus,” he wrote. “This includes following the lead of our regulators and working with them to ensure they’re satisfied completely with the airplane and our work, so that we can continue to meet our customer commitments. We’ll get it done, and we’ll get it done right.”

Reuters and Associated Press contributed to this report.

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