uploads/2019/10/Boeing-MAX-Design.png

Boeing MAX Design Flaws Caused Lion Air Crash

By

Updated

Indonesian investigators have identified design flaws and mechanical issues in Boeing’s (BA) 737 MAX aircraft as the reason for the deadly Lion Air crash in October 2018. The investigators revealed the information to the crash victims’ families during a briefing on the morning of October 23, Reuters reported.

Investigators also pointed out that a lack of information on how to deal with flight-control system malfunctions also contributed to the accident. Preliminary investigation reports had pointed to a software glitch in the MCAS (Maneuvering Characteristics Augmentation System), or flight-control system.

According to Reuters, the investigators said that the system had been approved on incorrect assumptions of how it would function in a crash scenario. It also lacked documentation about how pilots would react to the situation. The slideshow stated that a “reliance on a single angle-of-attack sensor” made the flight-control system vulnerable, according to Reuters.

Today’s revelations confirmed the Wall Street Journal’s September 22 report. The report disclosed that investigators had identified design and regulatory flaws and “pilot errors and maintenance mistakes” as the reasons for the crash. The Lion Air accident was the first of two deadly crashes Boeing’s 737 MAX 8 faced in the span of just five months. The second crash occurred on March 10, 2019. This time Ethiopian Airlines was the operator.

Boeing 737 MAX software problem

Boeing has been trying to fix the software problem with MCAS since mid-March, but it hasn’t succeeded yet. In late June, the FAA (Federal Aviation Administration) found a new issue with MAX’s updated flight-control system. The agency’s pilots discovered that the software was taking a long time to respond to a situation in which the plane’s nose pitched down.

According to an August 5 Seattle Times report, Boeing is now redesigning the whole architecture of the MCAS system. The architecture change will allow MAX to take inputs from both of its flight-control computers instead of one. Boeing’s 737 series planes currently receive data from only one flight-control computer.

Boeing is working with the US regulatory body to fix these issues. However, the situation has worsened since last week after a leaked internal message pointed out that Boeing was aware of the fundamental problems with the MAX.

MAX’s return is integral

The return of MAX to service is crucial for Boeing’s growth prospects. MAX accounts for nearly 80% of Boeing’s total aircraft deliveries and contributes about 30% of its operating profit. However, since the flying ban in mid-March, shipments for its fast-selling jets have frozen.

As a result, the company’s overall commercial aircraft deliveries have fallen significantly. In the second and third quarters of 2019, its shipments fell 54% and 67%, respectively. In the second quarter, Boeing registered a 35% YoY fall in revenue and incurred a loss for the first time in the last 12 quarters.

Boeing isn’t alone in suffering due to the MAX crisis. The prospects of various aerospace equipment suppliers also depend on MAX’s return. Spirit AeroSystems (SPR) has the highest business exposure to Boeing’s MAX aircraft. The company builds nearly 70% of the total MAX plane structure. Boeing’s MAX aircraft account for 50% of Spirit AeroSystems’ total revenue.

Allegheny Technologies (ATI) supplies titanium products for aerospace applications. Triumph Group (TGI) provides aerostructures, interior components, landing gear, and ductwork for Boeing planes. Allegheny Technologies, Spirit AeroSystems, and Triumph Group stocks have fallen 23.2%, 20.8%, and 5.5%, respectively, since the Ethiopian Airlines accident.

More From Market Realist