Boeing made mistake in handling warning-system problem: CEO

Employees work in the cargo hold of a Boeing 727 MAX 9 test plane outside the company's factory, on March 14, 2019 in Renton, Washington. (AFP)
Updated 17 June 2019

Boeing made mistake in handling warning-system problem: CEO

  • Airbus executives said the Max crashes aren’t affecting their sales strategy, but are a reminder of the importance to the whole industry of ensuring safety

PARIS: The chief executive of Boeing said the company made a “mistake” in handling a problematic cockpit warning system in its 737 Max jets before two crashes killed 346 people, and he promised transparency as the aircraft maker works to get the grounded plane back in flight.
Speaking before the industry-wide Paris Air Show, Boeing CEO Dennis Muilenburg told reporters Boeing’s communication with regulators, customers and the public “was not consistent. And that’s unacceptable.”
The US Federal Aviation Administration has faulted Boeing for not telling regulators for more than a year that a safety indicator in the cockpit of the top-selling plane didn’t work as intended.
Boeing and the FAA have said the warning light wasn’t critical for flight safety.
It is not clear whether either crash could have been prevented if the cockpit alert had been working properly. Boeing says all its planes, including the Max, give pilots all the flight information — including speed, altitude and engine performance — that they need to fly safely.
But the botched communication has eroded trust in Boeing as the company struggles to rebound from the passenger jet crashes in Indonesia and Ethiopia.
“We clearly had a mistake in the implementation of the alert,” Muilenburg said.
Pilots also have expressed anger that Boeing did not inform them about the new software that’s been implicated in the fatal crashes.
Muilenburg expressed confidence that the Boeing 737 Max would be cleared to fly again later this year by US and all other global regulators.
“We will take the time necessary” to ensure the Max is safe, he said.
The model has been grounded worldwide for three months, and regulators need to approve Boeing’s long-awaited fix to the software before it can return to the skies.
Muilenburg called the crashes of the Lion Air and Ethiopian Airlines jets a “defining moment” for Boeing, but said he thinks the result will be a “better and stronger company.”
In the United States, Boeing has faced scrutiny from members of Congress and the FAA over how it reported the problem involving a cockpit warning light.
The feature, called an angle of attack or AoA alert, warns pilots when sensors measuring the up-or-down pitch of the plane’s nose relative to oncoming air might be wrong. Boeing has admitted engineers realized within months of the plane’s 2017 debut that the sensor warning light only worked when paired with a separate, optional feature but didn’t report the issue for more than a year, after the crash in Indonesia.
The angle-measuring sensors have been implicated in the Lion Air crash in Indonesia last October and the Ethiopian Airlines crash in March. The sensors malfunctioned, alerting anti-stall software to push the noses of the planes down. The pilots were unable to take back control of the planes.
Boeing told the FAA of what it learned in 2017 after the Indonesia crash.
Pilot Dennis Tajer, a spokesman for the union that represents American Airlines pilot, the Allied Pilots Association, said it’s good Muilenburg was willing to revisit the cockpit alert problem and to acknowledge Boeing mishandled conveying information.
But Tajer said he thinks Boeing made a series of unprecedented communication missteps that have “created a massive headwind to rebuilding trust.”
Restoring trust in the Max is Boeing’s No. 1 priority, Muilenburg said — ahead of an upgraded 777 and work on its upcoming NMA long-range jet.
The Max, the newest version of Boeing’s best-selling 737, is critical to the company’s future. The Max was a direct response to rival Airbus’ fuel-efficient A320neo, one of the European plane maker’s most popular jets; Airbus has outpaced Boeing in sales in the category.
The Max crashes, a slowing global economy, and damage from tariffs and trade fights threaten to cloud the mood at the Paris Air Show. Along with its alternating-years companion, the Farnborough International Airshow near London, the Paris show is usually a celebration of cutting-edge aviation technology.
Muilenburg forecast a limited number of orders at the Paris event, the first major air show since the crashes, but said it was still important for Boeing to attend to talk to customers and others in the industry.
He also announced that Boeing was raising its long-term forecast for global plane demand, notably amid sustained growth in Asia.
Boeing expects the world’s airlines will need 44,000 planes within 20 years, up from a previous forecast of 43,000 planes.
Muilenburg projected that within 10 years, the overall aviation market — including passenger jets, cargo and warplanes — would be worth $8.7 trillion, compared to earlier forecasts of $8.1 trillion.
Both estimates are higher than the ones from Airbus, which sees slower growth ahead.
However, Airbus is heading into the Paris show with confidence. It is expected to announce several plane sales and unveil its A321 XLR long-range jet. Airbus executives said the Max crashes aren’t affecting their sales strategy, but are a reminder of the importance to the whole industry of ensuring safety.


Japan’s households tighten purse strings as sales tax and typhoon hit

Updated 06 December 2019

Japan’s households tighten purse strings as sales tax and typhoon hit

  • Falls in factory output, jobs and retail add to fears of worsening slowdown after Tokyo unveils $122bn stimulus package

TOKYO: Japanese households cut their spending for the first time in almost a year in October as a sales tax hike prompted consumers to rein in expenses and natural disasters disrupted business.

Household spending dropped 5.1 percent in October from a year earlier, government data showed on Friday.

It is the first fall in household spending in 11 months and the biggest fall since March 2016 when spending fell by 5.3 percent. It was also weaker than the median forecast for a 3 percent decline.

That marked a sharp reversal from the 9.5 percent jump in September, the fastest growth on record as consumers rushed to buy goods before the Oct. 1 sales tax hike from 8 percent to 10 percent.

“Not only is the sales tax hike hurting consumer spending but impacts from the typhoon also accelerated the decline in the spending,” said Taro Saito, executive research fellow at NLI Research Institute.

“We expect the economy overall and consumer spending will contract in the current quarter and then moderately pick up January-March, but such recovery won't be strong enough.”

Household spending fell by 4.6 percent in April 2014 when Japan last raised the sales tax to 8 percent from 5 percent. It took more than a year for the sector to return to growth.

Compared with the previous month, household spending fell 11.5 percent in October, the fastest drop since April 2014, a faster decline than the median 9.8 percent forecast.

Analysts said a powerful typhoon in October, which lashed swathes of Japan with heavy rain, also played a factor in the downbeat data. Some shops and restaurants closed during the storm and consumers stayed home.

Separate data also showed the weak state of the economy.

The index of coincident economic indicators, which consists of a range of data including factory output, employment and retail sales data, fell a preliminary 5.6 points to 94.8 in October from the previous month, the lowest reading since February 2013, the Cabinet Office said on Friday.

It was also the fastest pace of decline since March 2011, according to the data.

Real wages adjusted for inflation, meanwhile, edged up for a second straight month in October, but the higher levy and weak global economy raise worries about the prospect for consumer spending and the overall economy.

While the government has sought to offset the hit to consumers through vouchers and tax breaks, there are fears the higher tax could hurt an economy already feeling the pinch from global pressures.

Japan unveiled a $122 billion fiscal package on Thursday to support stalling growth and as policymakers look to sustain activity beyond the 2020 Tokyo Olympics.

A recent spate of weak data, such as exports and factory output, have raised worries about the risk of a sharper-than-expected slowdown. The economy grew by an annualized 0.2 percent in the third quarter, the weakest pace in a year.

Analysts expect the economy to shrink in the current quarter due to the sales tax hike.