DUBLIN — This in-depth look at Boeing’s actions in the wake of the Lion Air crash, before the Ethiopian Airlines disaster, is illuminating. The most important thing it highlights is how difficult it can be for American companies to think about non-American consumers. It seems clear that Boeing either didn’t care too much about its emerging market clients or truly didn’t understand the differences between a market like the US and a market like Indonesia. It designed its planes for US airlines and US pilots, and it priced its safety features them too. Emerging market pilots and airlines were left to adapt as best they could. This is actually similar to how other US companies behave in foreign markets. Apple, for example, was very slow to introduce more-affordable versions of its flagship iPhone in emerging markets, and also dragged its feet in creating a dual-SIM version (dual-SIM phones are popular in markets like Asia). For whatever reason, Apple had trouble imagining that it would be worthwhile to redesign the iPhone to adapt to emerging market customers. Instead, it expected emerging market customers to adapt to the iPhone. The result is unsurprising. While Apple has 43% of the US smartphone market, it has just 7% of China’s and just 1.2% of India’s. As Apple tries to move into services, it will find itself at an almost insurmountable disadvantage in some of the world’s biggest markets. There’s a lesson here for other US firms. The centre of economic gravity is shifting eastwards, to the more-populous and faster-growing countries of Asia. If western companies want a piece of those markets, they’re going to have to figure out how to adapt to local needs. – Felicity Duncan

Between two deadly crashes, Boeing moved haltingly to make 737 MAX fixes

By Andy Pasztor, Andrew Tangel and Alison Sider

In the aftermath of a Boeing Co. 737 MAX jet crash in Indonesia in October, much of the American aviation industry – the plane maker, the FAA, US airlines and their pilots – closed ranks to reassure the public the model was safe to fly.
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Even after evidence emerged implicating a new automated flight-control system in the Indonesia disaster, the industry message was that pilots would be able to overcome glitches by following common emergency steps.

“Our pilots are trained to deal with any of these issues,” United Continental Holdings Inc. Chief Executive Oscar Munoz said at a March 7 aviation event in Washington. “Just fly the darn airplane – that’s what they’re taught.”

Three days later, a 737 MAX flown by United code-share partner Ethiopian Airlines nose-dived into the ground after six minutes aloft, an eerie replay of Indonesia’s Lion Air crash.

Much remains unknown about Boeing’s internal response during the roughly five-month window between the two crashes. But recent congressional testimony, as well as interviews with executives, regulators and others suggest the American aviation industry had an overly US-centric view about how to handle safety issues, and often a dismissive view of overseas pilots.

After the first crash, a top Boeing official told a gathering of US pilots they wouldn’t encounter similar problems, contending they were better trained than their counterparts in other countries, according to a person familiar with the meeting.

And the company was slow in coming up with a fix to the system identified as a major factor in the two crashes, according to people briefed on the details. Even though Boeing said engineers had been exploring a software patch since November, disagreements between Boeing and its regulator about a host of issues relating to the 737 MAX’s operation hampered progress, according to a person briefed on the details. The patch is still not ready and may not be for weeks.

The twin tragedies have spawned a series of investigations into whether Boeing and its regulator acted with sufficient urgency between the two crashes to address the 737 MAX’s design problems.

As early as this week, officials are expected to release early findings in their probe of the crash of Ethiopian Airlines Flight 302. The preliminary report, according to people familiar with the details, is expected to illustrate similarities with the Lion Air crash, including activation of the same suspect system, known as MCAS, triggered by faulty data from a sensor.

A Boeing spokesman said Monday the company is continuing to work with the US Federal Aviation Administration and other world regulators on the software changes and related training. “Safety is our first priority, and we will take a thorough and methodical approach to the development and testing of the update to ensure we take the time to get it right,” the spokesman said.

The crisis brings into sharp relief a major vulnerability for Boeing: As the Chicago-based plane maker increasingly depends on business from emerging markets hungry for air travel, it must focus on safeguards not only aimed at US aviators but also engineer planes with automated systems that new, relatively inexperienced pilots around the world can safely operate.

Before both crashes, a senior Boeing executive in an interview exemplified the company’s thinking, when he talked about the emergence of less-experienced pilots and how “you need something up there that is going to help them manage complexity and to maintain our record of safety.”

Once viewed around the globe as the gold standard for airline safety regulation, the FAA has seen its authority challenged in the wake of the crashes. Foreign regulators have taken unilateral action in grounding the Boeing jets, while US regulators and aviation policy makers have questioned whether the agency delegated too much oversight authority to the company.

Even as Boeing’s safety arguments started unraveling and a host of national aviation authorities grounded the planes, acting FAA chief Daniel Elwell stayed in lockstep with the manufacturer.

The decision to delay groundings, Mr. Elwell told a Senate subcommittee last week, reflected his conversations with US pilot union heads. “To a person,” he testified, they told him “we are absolutely confident in the safety of this aircraft, and our pilots’ level of training in flying it.”

On Monday, the FAA suggested it could take weeks more for final approval “to ensure that Boeing has identified and appropriately addressed all pertinent issues.” The agency added it won’t give its final sign-off until it is fully satisfied with Boeing’s submission.

Boeing launched the redesign of the 737, the best selling jet in its history, in the face of intensifying competition from its European rival Airbus. In adding larger, fuel-efficient engines, Boeing had to tweak the plane’s design and add the MCAS system to prevent potential stalls created by the revised placement of the engines. The idea was to make the 737 MAX handle like its predecessors, part of a goal to minimise additional training costs for airlines buying the new plane, which made its debut in 2017.

Boeing pulled in orders totalling more than $50bn, helping drive its stock price to a record high by early 2019. The company can take some comfort in the performance of the new flight-control software in the US. The FAA and airlines say there hasn’t been a single incident of MCAS misfiring in the roughly 50,000 737 MAX flights through March.

Days after Lion Air Flight 610 crashed, the company and the FAA maintained the 737 MAX model was perfectly safe, so long as pilots precisely followed emergency procedures on which they’ve been trained. U.S. airlines and their pilot unions vouched for the plane and their ability to safely fly it. In November, responding to preliminary investigative findings, Boeing issued a lengthy statement drawing attention to possible maintenance deficiencies and pilot error.

Lion Air expressed frustration with Boeing and raised the prospect of canceling its remaining MAX deliveries. “I’m very disappointed with the way Boeing has behaved,” Lion Air co-founder Rusdi Kirana said in an interview at the time. “You can’t blame your operator,” he said. “We are partners – we are not enemies.”

Publicly, Boeing continued to market the new aircraft and tout its new deals with customers. The company delivered around 125 of the jets to airlines and leasing companies between the Lion Air crash and the global grounding ultimately put in place March 13, pushing the fleet above 370. Most have gone to overseas carriers.

Inside Boeing, though, a group of engineers had been working on fixing suspected MCAS shortcomings since early November, according to Boeing.

By late that month, Boeing was facing blowback from its domestic constituents. Some pilot unions were sharply critical of the manufacturer for excluding mention of the stall-prevention system in 737 MAX manuals and training.

On Nov. 27, Boeing sent a delegation of four senior members of the company’s engineering, flight, government relations, and sales teams, to speak with American Airlines’ pilots union. The group included Mike Sinnett, vice president of product strategy, Allan Smolinski, sales director for the Americas, and John Moloney, director of transportation policy. The meeting was the first of its kind, according to the union.

Boeing officials told the pilots that Boeing had to design planes to accommodate pilots with different levels of experience and wanted to avoid inundating pilots with too much information. They said many airlines around the world didn’t want to take on additional training that extra indicators and alerts could require, a union official who attended the meeting recalled.

In another meeting in Washington around the same time, Mr. Sinnett told the Air Line Pilots Association that US crews wouldn’t encounter similar problems, suggesting they tend to be better trained and often more disciplined in following emergency procedures, than overseas pilots, according to a person who attended the session.

That analysis rang true with many US aviators, who note that economics and demographics dictate that commercial pilots in many overseas markets, especially fast-growing aviation regions in Asia and Africa, on average have significantly less flight experience than their US counterparts.

Still, Boeing officials told both unions that a MAX software fix was in the works, putting the completion date in mid-January, according to people present at the meetings.

That target turned out to be optimistic. Differences of opinion between Boeing and its regulator created complications. There were disagreements over whether mandatory cockpit alerts should be added to help pilots recognise a potential MCAS misfire, and a spectrum of opinion on whether the design needed to accommodate two sensors to measure the angle of the plane’s nose, according to one person briefed on the details. The planes came equipped with two sensors but only one fed into MCAS at any given time.

Boeing initially was cool to switching to twin sensors and proposed fewer training requirements than the FAA preferred, according to people briefed on the details.

Two U.S. carriers, American and Southwest Airlines Co., had already added some of the safety features under discussion, such as an alert that would signal when two sensors disagree. American, whose planes have had these features for years, also had displays to show the specific sensor measurements. Southwest opted to add that feature after the Lion Air crash. But these features cost around $50,000 to add, according to government documents, and many budget airlines overseas didn’t incorporate them.

As recently as early March, the FAA and Boeing were still arguing over how much training pilots should receive in the new system, according to people briefed on the talks. The FAA ultimately prevailed in its insistence that pilots receive interactive training on laptops and other devices.

A day after the Ethiopian crash, Boeing publicly announced the final details of its planned software update that went beyond what many industry officials familiar with the discussions had anticipated.

On March 12, the following day, Boeing and FAA experts flew the initial flight to test the redesigned flight controls.

The changes to the stall-prevention system that automatically pushes down a plane’s nose and can override manual pilot commands, mark a major shift from how Boeing originally designed the feature in the aircraft. The goal of the fix now is to make the system, known as MCAS, less powerful, more controllable by pilots and unable to misfire if it receives incorrect data from a sensor. Earlier proposals envisioned far fewer changes, according to one person briefed on the process.

In the wake of the Ethiopian crash, Boeing accelerated work on the update given the added urgency, according to two senior industry officials briefed on the plane maker’s response. Boeing assured customers, one of the officials said, the company is throwing “every possible resource” at fixing the MAX.

A Boeing official who outlined the timetable to reporters last week said the Ethiopian accident didn’t figure into the schedule for creating, testing and rolling out the fix.

He said that engineers, working with regulators and suppliers, were careful not to rush the fix through rounds of deployment, testing and tweaking before more testing as the changes evolved. “As we got into it, we realised that there were other ways that we could make the system even more robust than the initial changes we had in mind,” he said. “It took until now because we wanted to get it right.”

— Doug Cameron and Bradley Olson contributed to this article.

Write to Andy Pasztor at [email protected], Andrew Tangel at [email protected] and Alison Sider at [email protected]