Boeing 737 Max – The Saga Continues

Boeing 737 Max – The Saga Continues

by Srikrishnan A - Jun 29, 2019 05:28 PM +05:30 IST
Boeing 737 Max – The Saga ContinuesA Boeing 737 MAX landing in Canada (Pic by Acefitt via Wikipedia)
  • The problem with Boeing and the American aviation regulatory authority was the cosy relationship their respective officials shared.

    This prevented an impartial, clinical assessment of Boeing’s aircraft safety standards.

    Using such ‘deficiency in service’ as a tool for bargaining, India should look to drive home better trade deals with the US.


In a tweet posted on 15 April 2019, Donald Trump, President of the United States of America suggested Boeing Inc. rectify and rebrand the 737 Max, adding that “No product has suffered like this one”. The ‘suffering’ he referred to was the damage done to the reputation of Boeing’s prized fleet of 737 Max series of aircraft and the company, and consequently, its market capitalisation. Sifting through newspapers, one would have known of two fatal crashes of the doomed aircraft, within a span of four months. In October 2018, Indonesian Lion Air flight 610 crashed into the Java sea 12 minutes after take-off, killing all 189 on board.

In March 2019, Ethiopian Airlines flight 302 crashed six minutes after take-off, killing 157 people. Preliminary analysis of the flight data recorders of both planes reveals that both flights were plagued by similar issues. At the heart of these troubles is the MCAS (Manoeuvring Control Assistance System or Manoeuvring Characteristics Augmentation System).


Boeing modelled the Max as a re-engined variant of the older, and proven 737 series, to improve fuel economy. The new engines, the CFM LEAP-1B, were larger and heavier, and posed a challenge in being positioned on the wings. To overcome this, the engines were moved forward and slightly tilted upwards, to ensure adequate clearance for the rear tip of the engines. While this ‘solution’ overcame the positioning problem, it also meant that the nose of the aircraft would pitch upwards, every time thrust was added. While upward pitching is common for any aircraft with engines situated under the body, the change in engine position and angle on the 737 Max meant that this impact was much more, resulting in a danger of the aircraft stalling mid-air (where the plane is unable to get sufficient air under its wings to ensure lift and keep it flying).

To compensate for the design flaw, Boeing introduced the MCAS, a software system, which detects the angle of approach (AoA) through an on-board AoA sensor and automatically applies a downward force to tilt the nose downward. It is important to note that this crucial system did not have an adequate fail-safe mechanism.

While the official reports of both the accidents are yet to be released, preliminary investigations suggest that in both planes, the AoA sensor(s) had malfunctioned, resulting in the MCAS overcompensating, and practically pushing the plane towards the ground. This also seems to be corroborated by the cockpit voice recorder data recovered from the Lion Air crash, in which the pilots are heard to be battling with the system to keep the plane from falling.

How the MCAS works (Pic credit: 
How the MCAS works (Pic credit: 

A little historical perspective into the development of the 737 Max is warranted here. In the late 2000s, Boeing began exploring a replacement for the 737, which had already flown for close to half a century. Reportedly, the company was initially looking to go with a ‘clean sheet design’. In December 2010, Airbus launched the A320 Neo series with an eye on improving operating efficiency, particularly, the fuel economy.

Within seven months of its launch, the A320 Neo had garnered close to 1,100 orders from different airlines operating out of the US and Europe. Airbus, which was until then playing second fiddle to Boeing, was now appearing to threaten its dominance. Development of the 737 Max was launched in August 2011 in this backdrop. Boeing announced that the Max variant had 4 per cent greater fuel economy than the A320. Meanwhile, plans for the replacement of the 737 series were abandoned.


Tim Robinson, editor-in-chief of the Aerosociety Magazine, makes an interesting comparison between the 737 Max crashes and the DeHavilland Comet accidents back in the 1950s. In the latter’s case, three planes crashed within two years of entering service in 1952. It was eventually found that the DeHavilland’s metal frame could not withstand the amount of fatigue due to the thrust generated.

However, at the time of the aircraft’s development and entry into service, contemporary technology was neither sufficient to expect this trouble, nor to find a solution to it. Subsequent developments in aviation knowledge permitted the rectification of the issue.

In stark contrast, the Boeing crashes have not been caused due to pushing of the limits of technology. Rather, this is a case of an aircraft (essentially, the 737 series) flown successfully for more than 50 years, and of which more than 10,000 units have been already delivered. It is literally the largest selling civilian aircraft in the world. It would appear that in its search for protecting its market share, and in attempting to make a cheaper plane with more economical flight operations, Boeing has overlooked a critical component of flight safety. Credibility of the company, in the eyes of transporters, passengers, investors, and regulators, across the world has already been dented. Most aviation regulators across the globe, including India, have ordered immediate grounding of the 737 Max planes, and are awaiting the final investigation reports for each of the two crashes, to make an informed decision.

Regulators’ Role

The US Federal Aviation Administration (FAA), which is the first point of certification of the company’s planes, has also ordered an investigation into the incidents. The agency recently announced that it has discovered a ‘new potential risk’ that the company must mitigate. Facing heat from all quarters, Boeing has offered to upgrade the software on the 737 Max planes, also providing an additional safety feature, the ‘disagree light’, free of cost, which was otherwise chargeable separately.

However, the FAA also finds itself in the middle of a controversy for allowing Boeing too much leniency to test and certify its planes. News reports have emerged that the FAA officials had “too close a relationship” with Boeing executives, and the agency had shied away from “holding the company accountable”.

It goes on to state that the influence exerted by Boeing was so strong that FAA employees attempting to take action often feared internal retaliation for doing so. For example, Bahrami Ali, a senior FAA official and aerospace engineer who led the Transport Airplane Directorate at the FAA, and later took up a job with an aviation industry association (of which Boeing was a member). Part of his work with the association included lobbying with the regulator (his former employer) to permit companies like Boeing to have maximum influence in certifying planes.

Reportedly, Ali has now returned to the FAA as its Associate Administrator for Aviation Safety. One would be hard pressed to find a better example to explain the phrase ‘conflict of interest’! That the FAA represents some sort of a gold standard for aircraft testing and certification is a belief that has now been shaken, if not shattered. The US Senate Subcommittee on Aviation has also commenced an inquiry of its own into the process followed by the FAA in this regard.

But, as with most politically supervised inquiries, the hearings are likely to be partisan and the proceedings, inconclusive.


As the company grapples with order cancellations, production cuts, and possible legal action by customers, its main rival is already feeling the tailwinds. Airbus recently won a USD 35 billion deal, to expand its production facilities in Tianjin, China.

The deal is expected to further improve Sino-French cooperation, and importantly, give a boost to the Chinese in domestic civil aircraft manufacturing, which has not really taken off yet. Going by historical experience in manufacturing, the Chinese are likely to leverage on the technology as well as their own manufacturing base in a big way in the coming years and decades, to try and dominate the global market.

As things stand, Boeing is likely to be the biggest loser, unless the company manages to pull a rabbit out of its hat.

A publicly traded corporation, listed on the NYSE, the crashes have roiled Boeing Inc.’s stock valuation. The company has already lost approximately 10 per cent of its market capitalisation (USD 25 billion) since the second crash. Boeing has its fingers stuck in numerous pies, including commercial transport, defence manufacturing, R&D, and space exploration.

A large chunk of its revenues is derived from weapons development, manufacture and maintenance undertaken for the US and overseas governments (for instance, the AH-64 Apaches and the CH-47 Chinook helicopters ordered by the Indian Air Force are all creations of Boeing Inc.).

Historically, the company has managed to carve a niche for itself in a market, where quality and performance is paramount. The last thing that a company of its stature and profile can risk is a stigma of quality deficiency and that too, for the sake of economies.

Unfortunately, it appears that this is exactly what has happened.

Takeaway For India

Despite having a domestic aviation manufacturing industry which is yet to take root, India has a lot to boast of, on the global civil aviation pavilion. We are the world’s third largest civil aviation market, and the fastest growing one for over four years in a row. With annual passenger growth pegged at over 16 per cent, and favourable demographics, India has considerable leverage in the market, regardless of whether policy makers are conscious of it.

That Boeing has to ensure a lasting solution to the design fault on the 737 Max, or see its planes grounded indefinitely is a given. There can be no compromise on flight safety. For Indian airliners, the Directorate General of Civil Aviation (DGCA) must ensure this directly, regardless of any further FAA certifications. However, India can and must view this issue in a different context as well.

That the US government operates in favour of the military-industrial complex is no secret. Successive governments have provided bipartisan support to these industries, of which Boeing is a market leader. The company influences and is in turn influenced by US governmental decisions. The US has initiated a barrage of trade wars with allies and rivals, and India is no exception to the rule.

However, India has been playing the game rationally up until now, avoiding retaliatory tariffs, and using them only as a tool for negotiation. In continuing with its approach, India must try and gain maximum leverage using these recent developments as well. Tariff wars are never won on the basis of tariffs alone.

If the US can blacklist Huawei on the grounds of national security, (despite there being not a shred of hard evidence made public), it rests on the Indian government to demand concessions from the US on account quality deficiencies by its industry bellwethers and government agencies. It could be in the form tariff waivers, technology transfers or possibly, offsets. The Indian government has been dealt a high hand, and it should play the same.

Srikrishnan is a chartered accountant and company secretary. He follows business and geopolitical developments closely.

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