One year after Lion Air crash, Boeing 737 MAX remains grounded

The crisis has cost Boeing billions of dollars and spawned numerous investigations by US authorities, as well as lawsuits from victims’ families. (AFP)
Updated 30 October 2019

One year after Lion Air crash, Boeing 737 MAX remains grounded

  • The situation plunges the 103-year-old aerospace giant into the biggest crisis of its history

NEW YORK: On March 12, 2019, Dennis Muilenburg phoned US President Donald Trump for support after European and Chinese regulators grounded the Boeing 737 MAX following an Ethiopian Airlines crash that killed 157 people.

When Muilenburg hung up, the Boeing chief executive thought he had the backing of the US leader. But the next day, Trump announced that Boeing’s top-selling plane was “grounded effective immediately.”

Boeing’s entire global fleet of almost 400 MAX planes has stayed out of service ever since, plunging the 103-year-old aerospace giant into the biggest crisis of its history.

The situation has raised questions about Boeing’s commitment to safety and corporate culture while also tarnishing the company’s image as it continues to compete with archrival Airbus.

The crisis has cost Boeing billions of dollars and spawned numerous investigations by US authorities, as well as lawsuits from victims’ families.

The crisis actually began months earlier on October 29, 2018, when a MAX operated by Indonesian carrier Lion Air plunged into the Java Sea.

“Boeing blamed the pilots immediately in Lion Air, and then bungled the response thereafter,” said Scott Hamilton of Leeham News, an aviation publication.

“Boeing’s stubborn resistance to admit its mistakes — even as those mistakes have delayed the return to operation of 737 MAX planes — are turning this into a disaster for the company and its customers,” said Jim Hall, former chairman of the US National Transportation Safety Board (NTSB).

Indonesian investigators last week attributed the crash to nine factors, including inadequate pilot training and a poorly designed flight handling system known as the Maneuvering Characteristics Augmentation System (MCAS) that it said wasn’t properly certified by US regulators.

“These items were connected to each other. If one of them was not occurring on that day, the accident may not have happened,” said Nurcahyo Utomo, an investigator with Indonesia’s National Transportation Safety Committee.

If the investigation showed Lion Air’s pilots to be young and untested, it also revealed them to be in the dark about the MCAS, which was not mentioned in Boeing’s flight manual.

The system has also been implicated in the Ethiopian Airlines crash.

The MCAS was developed specifically for the MAX to guard against stalling that could be caused by the plane’s heavier engines.

The system was activated shortly after takeoff in both flights based on an incorrect sensor reading. The error stemmed from an angle of attack sensor that was approved for service by Xtra Aerospace, a Florida company that had its repair station certificate revoked by the FAA last week.

The pilots in two crashes were unable to regain control of the plane from MCAS, in part because the system was designed with no redundancy to that single sensor.

A report last month from the NTSB said Boeing and the FAA misjudged how pilots would respond to multiple alerts and alarms as they encountered trouble when flying the 737 MAX.

Another report earlier this month from a panel of global regulators concluded the FAA lacked the manpower and expertise to evaluate the MCAS.

A few days after the Lion Air crash, the FAA sent a directive to MAX operators about the risk of a faulty angle of attack sensor while Boeing developed an upgrade to the MCAS.

However, Boeing was still working on the correction at the time of the Ethiopian Airlines crash five months later.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: