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Law360 (January 19, 2021, 5:57 PM EST) --
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| Alan Hoffman |
The order allows operation of the 737 Max upon satisfaction of all applicable requirements for return to service — ending the longest grounding order in the history of commercial aviation.
American Airlines Group Inc. began flying the Max between New York and Miami on Dec. 29, 2020, and United Airlines Holdings Inc. has the aircraft in its schedule for February. Southwest Airlines Co., Boeing's most loyal 737 customer, has announced that the aircraft will return to service in March.
Now that the legal obstacles have been removed, the effect of two years of massive adverse publicity and a vastly changed industry environment resulting from the worldwide COVID-19 pandemic on the commercial prospects for the troubled aircraft remains to be seen. What is its current status? Do airlines still want and need the Max? And once back in operation, will passengers be willing to fly on it?
The Current Situation
The FAA's Nov. 18 order requires compliance with an airworthiness directive[1] issued the same day before the plane can be operated. It mandates the following actions for U.S.-registered 737 Max airplanes:
- Installation of new flight control computer software and new 737 Max display system software;
- Incorporation of certain airplane flight manual flight crew operating procedures;
- Modification of horizontal stabilizer trim wire routing installations;
- Performance of an angle of attack sensor system test; and
- Performance of an operational readiness flight.
In addition, the airworthiness directive requires that operators with an existing FAA-approved minimum equipment list incorporate more restrictive provisions in order to be able to dispatch the airplane with certain inoperative equipment.
These requirements are designed to correct the deficiencies in the maneuvering control augmentation system, or MCAS, implicated — along with serious maintenance and airmanship deficiencies — in the Lion Air and Ethiopian Airlines crashes.
The FAA must also approve 737 Max pilot training program revisions for each U.S. airline operating the Max. And airlines that have parked their Max aircraft must take required maintenance steps to prepare them to fly again.
As to international recertification and operation, the FAA says:
Do airlines want the Max?The design and certification of this aircraft included an unprecedented level of collaborative and independent reviews by aviation authorities around the world. Those regulators have indicated that Boeing's design changes, together with the changes to crew procedures and training enhancements, will give them the confidence to validate the aircraft as safe to fly in their respective countries and regions.[2]
The Max returns to an air travel environment radically different from when it was grounded in March 2019. At that time, airlines enjoyed record demand, and grounding the plane severely impacted schedules and capacity.
Much of the Max's operator appeal was its significantly improved economics with new, more efficient engines. But airlines were forced to keep using older, less efficient planes in service, while simultaneously losing the additional capacity that newly delivered aircraft would have provided.
Things changed drastically with the onset of the global pandemic in early 2020. Passenger traffic fell precipitously to a fraction of pre-COVID-19 levels, and airlines were glad to be able to defer delivery of Max orders.
Many pending orders were cancelled outright. Airbus also experienced widespread delivery extensions and order cancellations for its competing A321neo series due to the spread of the virus.
Jon Hemmerdinger of Flight International describes the ungrounding of the 737 Max as "in some senses only the beginning of Boeing's troubles." In the 10 months ending in October 2020, Boeing's Max order backlog fell by over 1,000 — 450 of which were outright cancellations, and the rest dictated by accounting standards.
Its current backlog of 3,364 aircraft has been bolstered by several new orders, including one for 75 announced by Ryanair Holdings PLC announced in early December. But it still has an inventory of 450 completed but undelivered airframes, only half of which it expects to deliver in 2021, with the balance in 2022, before any increased production can be expected. And supplier Spirit AeroSystems Holdings Inc., which manufactures 737 fuselages, has an inventory of 128 shipsets yet to be delivered to Boeing.[3]
Historically, Boeing was renowned for excellence and innovation in design and engineering. It created such groundbreaking planes as the B-52 bomber, still in active service nearly 70 years after its first flight; the 707, which launched the Jet Age of air travel; and the 747, the first wide body jet. The Max debacle has severely and perhaps permanently tarnished that reputation.
Since the March 2019 grounding order, governmental investigations and media reporting have uncovered serious flaws in the design and certification process, as well as lax FAA oversight which allowed them to go undetected. A troubling picture unfolded in which the competitive pressure from archrival Airbus' A321neo project led Boeing to stretch the 45-year-old 737 design beyond its limits.
The result was undue haste and corner cutting, with MCAS serving as a Band-Aid to deal with stability and control issues resulting from fitting much larger engines to the existing airframe. Already suffering from a stagnating market for its 777 and 787 wide-bodies, Boeing now faces severely constricted demand for its bestselling single-aisle product, and nothing to counter the competitive advantage of Airbus' A321XLR.
Boeing's future prospects are inextricably connected to those of the airlines, about which there remains considerable uncertainty at this point. The International Air Transport Association currently forecasts air travel demand to remain below prepandemic levels until early 2024.
But Teal Group Vice President of Analysis Richard Aboulafia is more upbeat:
Once demand recovers, the Max could enjoy a renaissance as airlines retire older, less efficient planes and seek to rapidly increase capacity.I don't understand why it would take that long. There's nothing fundamental that has changed. The vaccines look far better than expected. And the world's economy has fared far better than people feared, too. The prospects are good for a full recovery. In terms of airline traffic, we just moved our recovery date forward. It had been late 2023. We're now expecting late 2022. And as the Max returns to service, it will be domestic traffic that recovers fastest and most.[4]
Will passengers fly the Max?
Another question mark is whether the avalanche of negative publicity from the two fatal crashes and subsequent revelations about cost-cutting and corner-cutting by Boeing, and inadequate FAA oversight of the plane's design and certification, will cause passengers to shun it.
Generally, public perceptions of airline equipment are limited to size, comfort and amenities, and the Max represents the current state of the art in that realm. But no airliner has had so much bad press for so long, and some fallout seems inevitable.
On Dec. 18, 2020, the U.S. Senate Committee on Commerce, Science, and Transportation released a report rehearsing the prior history of the Max, and adding a new allegation that during the plane's recertification testing, Boeing "inappropriately influenced FAA human factor testing of pilot reaction times" involving MCAS.[5]
The airline safety interest group Flyers Rights has filed a petition for administrative review of both the airworthiness directive and the ungrounding order with the U.S. Court of Appeals for the District of Columbia Circuit, claiming in a news release that they are based on "secret data and secret testing that is clearly legally inadequate." No such allegation is contained in the petition for review, however.[6]
Families of Lion Air and Ethiopian Airlines crash victims have also called on the FAA to rescind the orders. And on Jan. 7, the U.S. Department of Justice announced a $2.5 billion deferred prosecution agreement with Boeing to settle a charge of criminal conspiracy to defraud the FAA in connection with the safety of MCAS.
There's no realistic prospect that the FAA will revisit the Max issues at this point. And even if Flyers Rights can establish the requisite standing to maintain its suit, courts are loath to second-guess the FAA on matters of aircraft design, technology and airworthiness. But these developments will remind the public of the Max's woes as it returns to commercial service.
How will passengers react to all of this? Max operators have said they will allow passengers to rebook on other types of aircraft at no charge upon request. Aviation consultant Mike Boyd of Boyd Group International thinks airlines will rebrand the plane, referring to it by a generic term such as 737-8 instead.[7] Passenger rights organizations might object to this as deceptive and misleading, however.
Aboulafia disagrees. "I'm not anticipating any problems getting people to fly this jet," he says, dismissing polls showing that a majority of potential travelers would refuse a Max booking if made aware of it:
ConclusionThere are generally two kinds of people: those who are aware of the variant, and its history and status, and how it can be distinguished from the other 7,000-plus 737s out there, and those who aren't. The latter group, of course, aren't a factor. Of the former group, if they're knowledgeable about the plane, they're also aware that this is the single most scrutinized jet in history, and that its controls have been completely redone.
The Max today is perhaps the most thoroughly and exhaustively tested airliner in history. As a result, it is probably one of the safest as well.
Travelers now are most concerned about COVID-19 exposure in the airport and airline environment, and the Max saga may fade from view. But public perceptions and psychology are fickle, driven by emotion rather than fact and science.
Reporters will likely headline every Max incident, no matter how minor. And another serious accident, irrespective of its underlying cause, could make the plane anathema, as the Lockheed Electra crashes did for that aircraft 60 years ago.
Alan Hoffman was a product liability attorney for 43 years, until his retirement from Husch Blackwell LLP in 2017. He is an aviation historian, a private pilot and a member of the Experimental Aircraft Association and the Missouri Aviation Historical Society.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Airworthiness Directive AD 2020-24-02.
[2] Federal Aviation Administration, "FAA Updates on Boeing 737 MAX," Nov. 18, 2020, https://www.faa.gov/news/updates/?newsId=93206.
[3] Jon Hemmerdinger, "The Return of the MAX," Flight International, December, 2020, pp. 6-7.
[4] Quotes from Richard Aboulafia are taken from the author's correspondence and conversations with him, with his permission.
[5] U.S. Senate Committee on Commerce, Science and Transportation, Committee Investigation Report, "Aviation Safety Oversight," December 2020, https://www.commerce.senate.gov/services/files/FFDA35FA-0442-465D-AC63-5634D9D3CEF6.
[6] Flyers Rights Education Fund Inc. et al. v. Federal Aviation Administration et al., in the U.S. Court of Appeals for the D.C. Circuit, Case No. 20-1486.
[7] Sabri Ben-Achour, "FAA says Boeing 737 MAX is safe to fly. Will passengers agree?," Marketplace, Nov. 18, 2020, https://www.marketplace.org/2020/11/18/faa-says-boeing-737-MAX-is-safe-to-fly-will-passengers-agree/.
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