Boeing to invest $1 billion in global safety drive 

Boeing will launch the pilot development project after regulators approve changes to 737 MAX software and training and the plane resumes flights. (Reuters)
Updated 06 November 2019

Boeing to invest $1 billion in global safety drive 

  • 737 MAX is expected to restart service in Europe during first quarter of 2020

SEATTLE, HONG KONG: Boeing Co. is planning an initial investment of around $1 billion into industry-wide pilot development as part of a long-term initiative to reduce risks like those faced by the crew in two 737 MAX crashes, people familiar with the matter said.

The embattled plane-maker is trying to rebuild trust and cooperation with airlines, passengers and regulators around the world after the 737 MAX was grounded in March, following crashes in which a total of 346 people died.

Details of the company’s “Global Aviation Safety” initiative remain under wraps due to delays in returning the 737 MAX to service, as attention focuses on changes to cockpit software that investigators say played a major part in the two crashes.

Boeing will launch the pilot development project after regulators approve changes to 737 MAX software and training and the plane resumes flights, one of the people familiar with the matter said. The company currently expects that to happen in the US by year-end.

The plane is likely to return to service in Europe during the first quarter of 2020, the head of the EU Aviation Safety Agency (EASA) said earlier this week.

The pilot project spending budget, people familiar with it said, will be in addition to the more than $8 billion in costs from compensation to airlines for delayed aircraft deliveries and lower production tied to the 737 MAX grounding.

The training initiative is still being developed and will be rolled out over years, one of the people said. While costs are expected to rise over time, the effort may overlap with future aircraft programs.

“It will involve significant funds to raise standards around the world and requires Boeing putting its own money in,” said another person familiar with the project.

Boeing Chief Executive Dennis Muilenburg was accused by US lawmakers in back-to-back hearings last week of placing profits over those safety standards, a charge Boeing denies.

Muilenburg said Boeing would help “build a talent pipeline” of pilots and invest heavily in the pilot-machine interface or fight deck for the next generation, but gave few details.

A Boeing spokesman declined additional comment.

Part of Boeing’s investments will include improving aviation infrastructure, such as air traffic and flight simulation systems, a third person with knowledge of the plans said.

It is also considering whether to develop new training materials or methods for various career stages, and fund training centers or recruitment efforts, the people said.

Boeing could also create a data-sharing network on aircraft design with global regulators, one of the people said, in a bid to improve outside knowledge of its aircraft technology and operations.

The head of the EASA told Reuters in a recent interview that it would demand more data when deciding whether to certify future jets.

Outlines of the new investment were drawn up in the wake of the crashes as Boeing executives acknowledged that stall-prevention software known as MCAS confused the pilots due to an overwhelming workload, the people said.

Investigations have raised questions over whether that was in part due to faulty assumptions about the hazards involved, leading to a design that placed unrealistic demands on pilots.

Investigators and global regulators have also pinpointed concerns about certification and training.

Boeing says it followed industry practice on reaction times.

Experts say that Boeing, as the largest plane-maker in the world, and its regulator, US Federal Aviation Administration, have played a key role in shaping global standards around aircraft design and operations.

Even before the crashes, the aircraft industry was bracing for a staffing shortfall of 1.5 million aircraft technicians and pilots over the next 20 years.

Both Boeing and Europe’s Airbus have already launched beginner training programs to help ease the shortages.

The crashes have also sped up a rethink of safety needs in emerging markets, where demand for new jets is driving a huge share of Boeing’s business. But airlines face gaps in regulation and infrastructure.

Safety experts have voiced concerns that the sheer growth of aviation has lowered the bar for the skills required to enter training, adding pressure for cockpit and training improvements.

“There is a large generation of pilots that will be needed over the next 20 years and we need to be thinking about designing our airplanes for that next generation,” Muilenburg said at the hearing last week.

Alibaba confirms huge Hong Kong public listing worth at least $13bn

Updated 15 November 2019

Alibaba confirms huge Hong Kong public listing worth at least $13bn

  • Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade
  • Alibaba Chief Executive Officer said the group wanted to participate in Hong Kong’s future

HONG KONG: Chinese technology giant Alibaba on Friday confirmed plans to list in Hong Kong in what it called a $13 billion vote of confidence in the turbulent city’s markets and a step forward in its plans to go global.
The enormous IPO, which Hong Kong had lobbied for, will come as a boost for authorities wrestling with pro-democracy protests that have tarnished the financial hub’s image for order and security and hammered its stock market.
Alibaba will offer 500 million shares at a maximum of HK$188 apiece to retail investors, the company said. The number eight is considered auspicious in China.
Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade after insurance giant AIA raised $20.5 billion in 2010.
Alibaba had planned to list in the summer but called it off owing to the city’s long-running pro-democracy protests and the China-US trade war. The US and China are now working on sealing a partial trade deal.
Daniel Zhang, Alibaba Chief Executive Officer, said the group wanted to “contribute, in our small way, and participate in the future of Hong Kong.”
“During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright,” he said.
The firm’s shares are already traded in New York. A second listing in Hong Kong is expected to curry favor with Beijing, which has sought to encourage its current and future big tech firms to list nearer to home after the loss of companies such as Baidu to Wall Street.
In the statement, Zhang said that when Alibaba went public in 2014 it “missed out on Hong Kong with regret.”
Mainland authorities have also stepped up moves to attract such listings, including launching a new technology board in Shanghai in July.
The listing comes after the city’s exchange tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing Alibaba’s billionaire founder Jack Ma to sell shares in the city.
“The listing in Hong Kong will allow more of the company’s users and stakeholders in the Alibaba digital economy across Asia to invest and participate in Alibaba’s growth,” the company said.
It has long been expected to launch a multibillion-dollar stock listing in Hong Kong but appeared to postpone the offering because of political and economic turmoil.
Hong Kong’s key Hang Seng Index rose 0.48 percent in morning trading following the announcement
Chinese shoppers set new records for spending on Monday’s annual 24-hour “Singles’ Day” buying spree, despite an economic slowdown in the country and the worries over the US trade war.
It said consumers spent $38.3 billion on its platforms over that stretch, up 26 percent from the previous all-time high mark set last year.
Alibaba also said it saw record amounts of cross-border sales, underlining its plans to expand globally.
“Globalization is the future of Alibaba Group. We firmly believe the marriage of digital technology and commerce will bring about unprecedented change that will not be limited by borders,” Zhang said.