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Boeing Crash Sheds Light on Industry as Revenues Tumble

 

May 13, 2018 (Investorideas.com Newswire) The second of two fatal crashes of the Boeing 737 Max, was the straw that broke the camels back. The plane has been grounded world wide which came within day of the second crash. The culprit was software that pointed the aircraft to the ground upon takeoff. Some of the planes sold did not have advanced safety features that allowed other 737 Max planes to combat the failed software. Share trading in the aviation industry has been volatile in the wake of these events.

What Occurred

In October of 2018, Lion Air, out of Indonesia crashed minutes after take off. This was the first fatal accident involving the Boeing 737 Max, which killed 189 people. In March of 2019, a second Boeing 737 Max crashed. This was flight 302 on Ethiopian Airlines which also crashed minutes after take off killing 157 people. According to investigators, in both cases, faulty sensor data engaged software which automatically tilts the horizontal stabilizer and pushes the planes to nose down to prevent the plane from sailing in the air.

The Boeing 737 Max relied on a single attack sensor that points into the wind to measure the angle between the nose of the plan and the wind for the forward momentum of the plan. This measurement is then relayed to the Maneuvering Characteristics Augmentation System, (MCAS) to gauge whether the winds on the plane have enough angle to lift off.

How Did This Happen?

In the aftermath of the second crash, all Boeing 737 Max planes were grounded world wide. An investigation drew out statements from Boeing indicates that the company knew about a problem with the 737 Max aircraft well before the first crash, but decided not to immediately do anything about it. The company said that the alert system that was initially expected to be a standard feature on the 737 Max was not operating on all planes that were sold.

The government agency that is in charge of oversight is The Federal Aviation Administration (FAA). Since they are understaffed they regularly delegate some of its responsibilities to companies that it regulates, including Boeing. Some Boeing employees were partly responsible for certifying the Max as airworthy.

What is Happening Now?

The Justice Department, the Department of Transportation and other agencies are now investigating the crash and Boeing's relationship with the FAA. For Boeing's part, they are working on software updates for the 737 Max 8 aircraft but this may not be enough to satisfy critics.

All Max 8 planes will be changed to provide additional data into a system designed for the 737 Max Maneuvering Characteristics Augmentation System. As for Boeing, revenue has slumped. The Max, which airlines first began flying in 2017, is only a relatively small portion of the global aircraft fleet, so disruptions have been minimal. But carriers like Southwest and American Airlines have had to adjust their schedules in some cases through August to account for the grounding. This has also put pressure on revenue production for these companies. Boeing has thousands of unfilled Max orders, and its first quarter of this year, its revenue slumped.

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