Boeing, Qatar Airways strike deal for 777-8 freighter, 737 Max 10 orders

Qatar Airways has committed to order up to 50 Boeing 777-8 freighter jets, including 34 firm orders and options for 16 additional planes, in a total purchase worth more than $20 billion at current list prices.

The order, which marks the largest freighter commitment in Boeing history by value, will support hundreds of U.S. suppliers from across 38 states, sustain more than 35,000 U.S. jobs and provide an annual estimated economic impact of $2.6 billion during the contract’s delivery period, according to Boeing.

Boeing will build the 777-8 Freighter in its Everett, Washington, factory, with the first delivery expected in 2027. The aircraft will include GE9X engines produced by GE Aviation. With a range of 4,410 nautical miles, the 777-8 Freighter has a maximum structural payload of 118 tonnes, allowing customers to make fewer stops and reduce landing fees on long-haul routes.

Boeing and Qatar Airways signed a letter of intent to purchase five 777 Freighters, valued at $1.7 billion at list prices, on Jan. 31, 2022. This rendering shows the airplane in the carrier’s livery. (Boeing illustration)

As part of the agreement, Qatar Airways will convert 20 of its 60 777X family orders to the 777-8 Freighter and order two of Boeing’s current 777 freighters.

In addition, the companies signed a memorandum of understanding for an order of up to 50 Boeing 737-10 aircraft, including 25 firm orders and options for 25 additional planes, for a total value of nearly $7 billion at current list prices.

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Monday’s announcement covers up to 102 airplanes total with a list price value of approximately $34 billion inclusive of engines.

The deal was solidified during a formal signing ceremony at the White House on Monday by Boeing Commercial Airplanes CEO Stan Deal and Qatar Airways Group CEO Akbar Al Baker. Other officials in attendance included Commerce Secretary Gina Raimondo, White House National Economic Council Director Brian Deese, Boeing CEO Dave Calhoun and Qatar’s ambassador to the U.S., Sheikh Mishaal bin Hamad Al Thani.

Qatar Airways Group CEO Akbar Al Baker and Boeing’s Kevin McAllister sign a memorandum of understanding for five Boeing 777 Freighters in the presence of the Qatari Minister of Finance and Qatar Airways Chairman Ali Sharif Al Emadi (left) and Qatar a (Boeing)

“The Biden administration has prioritized the revitalization of our manufacturing economy. This investment from our friends in Qatar represents another step toward fulfilling that priority,” Raimondo said in a statement. “It means good jobs right here in America, billions of dollars more in exports, and a much-needed boost to America’s manufacturing sector.”

Raimondo added that the deal “underscores the importance of revitalizing America’s semiconductor industry.”

“Each of these aircraft will require an enormous amount of chips, which is why the administration is urging Congress to put a semiconductor bill on President Biden’s desk as soon as possible,” she said. 

Qatar Airways’ move comes less than two weeks after Airbus ended its contract for 50 A321neo planes, a direct competitor to Boeing’s Max jets, amid a months-long dispute over cracked paint and other issues on its A350 planes. Boeing shares surged on news of the order.

Source: Boeing, Qatar Airways strike deal for 777-8 freighter, 737 Max 10 orders | Fox Business

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Sweeping Failures and Insufficient Oversight Led to Boeing 737 Max Crashes, Scathing House Report Finds

Sweeping failures by Boeing engineers, deception by the company and significant errors in government oversight led to the two fatal crashes of the 737 Max, congressional investigators have concluded.

A 245-page report issued Wednesday provides the most scathing account so far of the miscalculations that led to 346 deaths, the grounding of Boeing’s best-selling jet and billions of dollars in losses for the manufacturing giant.

“The Max crashes were not the result of a singular failure, technical mistake or mismanaged event,” the report by the House Transportation and Infrastructure Committee said. “They were the horrific culmination of a series of faulty technical assumptions by Boeing’s engineers, a lack of transparency on the part of Boeing’s management and grossly insufficient oversight by the” Federal Aviation Administration.

The report — the result of five investigative hearings, a review of about 600,000 pages of documents, interviews with top Boeing and FAA officials and information provided by whistle-blowers — makes the case for broad changes in the FAA’s oversight of the aircraft industry.

It offers a more searing version of events than the sometimes technical language in previous crash reports and investigations, including one conducted by the Transportation Department’s Inspector General.

The conclusions were drawn by the majority staff under committee Chairman Peter DeFazio. The report cites five main reasons for the crashes:

  • Pressures to update the 737’s design swiftly and inexpensively
  • Faulty assumptions about the design and performance of pilots
  • What the report called a “culture of concealment” by Boeing
  • Inherent conflicts of interest in the system that deputizes Boeing employees to act on behalf of the government
  • The company’s sway over top FAA managers

DeFazio said he found it “mind boggling” that Boeing and FAA officials concluded, according to the report, that the plane’s design had complied with regulations in spite of the crashes.

“The problem is it was complaint and not safe — and people died,” he said. “Obviously, the system is inadequate.”

Lawmakers are drafting legislation designed to reform how the FAA oversees companies such as Boeing and reviews aircraft designs. The Senate Commerce Committee plans to vote on a bipartisan bill on Wednesday. DeFazio, an Oregon Democrat, hasn’t yet unveiled his legislation.

Republican leaders on the House committee took issue with the report’s findings, saying they represented partisan overreach that went beyond what other reviews have found.

“Expert recommendations have already led to changes and reforms, with more to come,” said a joint statement from Sam Graves of Missouri and Garret Graves of Louisiana. “These recommendations — not a partisan investigative report — should serve as the basis for Congressional action.”

Boeing said in a statement it had cooperated with the committee’s investigation and had taken steps at the company to improve safety.

“We have learned many hard lessons as a company from the accidents of Lion Air Flight 610 and Ethiopian Flight 302, and from the mistakes we have made,” the company said. “Change is always hard and requires daily commitment, but we as a company are dedicated to doing the work.”

The FAA said in a statement late Tuesday night that it was committed to working with the committee to make improvements. “We are already undertaking important initiatives based on what we have learned from our own internal reviews as well as independent reviews of the Lion Air and Ethiopian Airlines accidents,” the agency said in the statement.

But tensions between the committee staff and the FAA were clearly evident. Ali Bahrami, who oversees safety at the agency, came under repeated criticism in the report for what the committee called his lack of awareness of issues surrounding the Max and the accidents. The committee staffers declined to provide him with questions before the Dec. 5 interview, which made it difficult for him to recall documents and events, an FAA counsel warned at the start of the interview, according to a transcript.

While DeFazio and other lawmakers haven’t called for a permanent grounding of the jet, the father of a woman who died in the Ethiopia crash said the report raised questions about the plane’s return to service.

“The FAA should immediately halt the recertification process for the 737 Max in light of this report,” said Michael Stumo, father of Samya Stumo. He accused Boeing and the FAA of withholding information from the families of victims in an emailed statement.

The 737 Max was grounded March 13, 2019, three days after the second crash involving a safety feature on the plane that malfunctioned and repeatedly sent the planes into a dive toward the ground.

Boeing and regulators had approved the design under the assumption that flight crews could recognize and override a malfunction of the system within a few seconds. Even though the system could have been disabled by flipping two cockpit switches, pilots on a Lion Air flight departing from Jakarta on Oct. 29, 2018, and an Ethiopian Airlines plane leaving Addis Ababa on March 10, 2019, became confused, lost control and crashed.

The feature, known as Maneuvering Characteristics Augmentation System, was designed to make the Max feel exactly the same to pilots as the earlier family of 737s known as the Next Generation. However, the system was triggered erroneously by a single sensor that failed in both crashes and it continued to push the nose down repeatedly.

The FAA has tentatively approved multiple design changes to prevent such an accident in the future and the plane could be certified to resume operations in the fall.

The House report identifies numerous instances in which it alleges the company should have known that MCAS was potentially dangerous.

For example, a Boeing test pilot during the early development of the plane in 2012 took more than 10 seconds to respond to an erroneous MCAS activation, a condition the pilot concluded could be “catastrophic,” the report said.

“The reaction time was long,” one Boeing employee told another in an email on Nov. 1, 2012, which was viewed by Bloomberg. The unidentified employee asked whether the rating of the system’s risks should be raised, which may have prompted a more thorough safety review.

Those concerns “were not properly addressed” and the company “did not inform the FAA,” the report said.

Boeing ultimately concluded that flight crews would react far swifter to an MCAS failure, typically within four seconds.

The report also said the responses by Boeing and the FAA to the first accident — warnings to pilots issued in early November 2018 — weren’t adequate to prevent a second crash.

“Both Boeing and the FAA gambled with the public’s safety in the aftermath of the Lion Air crash, resulting in the death of 157 more individuals on Ethiopian Airlines flight 302, less than five months later,” the report said.

The guidance on how to avoid an accident during an MCAS failure detailed the symptoms pilots would see and reminded crews how to shut it off. The committee criticized Boeing and the FAA for not mentioning the system’s name.

FAA officials have said they debated whether to include MCAS in the directive, but opted not to because it wasn’t mentioned in pilot flight manuals. Boeing within days sent additional guidance to airlines on MCAS and how it worked. Details on MCAS were also widely reported in the news media and internal airline documents obtained by Bloomberg show that it had been explained to Ethiopian Airlines pilots before their crash.

‘Undue Pressure’

A key finding involves a long-standing practice — which was expanded by Congress several times — to deputize Boeing employees to act in behalf of FAA while reviewing aircraft designs.

According to a 2016 survey obtained by the committee, 39% of Boeing’s Authorized Representatives, senior engineers who conducted reviews for FAA, at times perceived “undue pressure” on them from management.

One such senior engineer knew that Boeing was delivering Maxes to customers without a required alert in 2017 and 2018, yet didn’t notify FAA, the report said. The lack of such an alert was cited by Indonesian investigators as a factor in the Lion Air crash.

Both House and Senate legislation is expected to seek reforms of the so-called delegation system, which the report said is riddled with “inherent conflicts of interest.”

Boeing opted almost a decade ago to update the 737 to compete against a similar redesign of the Airbus SE A320 family. It faced intense pressure to ensure that — just as Airbus promised — pilots transferring from earlier 737 models didn’t need expensive additional simulator training.

Simulator Training

The company had agreed to pay Southwest Airlines Co. $1 million per aircraft if Max pilots had to train in the simulator before transitioning to the new plane, which could have cost it between $200 million to $400 million.

The push to avoid simulator training led to multiple poor decisions by Boeing, the committee alleged. The manufacturer rejected adding a sophisticated safety system that might have helped in the accidents at least in part because it would have required additional training.

The company also deemphasized MCAS to the FAA as a result. In a 2013 company document, Boeing said it would describe MCAS to the FAA as an add-on to an existing system. “If we emphasize MCAS is a new function there may be a greater certification and training impact,” the memo said.

The broad failure to fully explain MCAS was a critical issue because the system was made more powerful midway through its development, but many within the FAA didn’t know and the agency delegated the final safety approvals to the company, the report found.

“The combination of these problems doomed the Lion Air and Ethiopian Airlines flights,” the report said.

By Alan Levin / Bloomberg

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British Airways Flight Crosses the Atlantic in Less Than 5 Hours

For the first time in years, a commercial passenger plane has flown across the Atlantic in less than five hours.

A British Airways flight landed early Sunday morning at Heathrow Airport in London after leaving John F. Kennedy International Airport in New York just four hours and 56 minutes earlier.

That set a new speed record for subsonic — or slower than the speed of sound — commercial aircraft to fly between the two cities, according to Flightradar24, which tracks global flights.

The previous record was held by a Norwegian Air flight, which flew between the two cities with a flight time of five hours and 13 minutes.

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The flight had been expected to take 102 minutes longer. The recent average flight time between New York and London is 6 hours and 13 minutes, according to Flightradar24.

The wind and air currents were ideal for a fast flight, said Ian Petchenik, Flightradar24’s director of communications. “In the winter, the jet stream dips down a bit,” he said. “It’s kind of in a perfect spot for flights across the North Atlantic to take advantage of it.”

British Airways just narrowly beat out a Virgin Atlantic flight, which arrived in London at around the same time but one minute slower.

British Airways confirmed the flight time for the Boeing 747 plane, saying the company prioritizes safety over speed.

The supersonic Concorde flights used to fly across the Atlantic in just over three hours, but stopped flying in 2003.

By Associated Press February 10, 2020

Source: British Airways Flight Crosses the Atlantic in Less Than 5 Hours

British Airways has officially broken the record for the fastest flight time from New York to London. BA 112, a Boeing 747-400, flew from New York to London in 4 hours and 56 minutes beating Norwegian’s previous record of 5 hours and 13 minutes. Additionally, two Virgin Atlantic A350-1000s flew from New York to London in under 5 hours but not as short as British Airways 112. This record was broken thanks to Storm Ciara’s 200 mph tailwind. ✈ Ishrion Aviation is an Aviation Channel bringing you premium trip reports/reviews and the latest aviation news and developments to your fingertips. ▶️ If you enjoyed this video, make sure to subscribe for more interesting aviation content! https://www.youtube.com/c/IshrionAvia…

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The Problem With Suing Boeing For Its 737 MAX: Consequences

Airlines and leasing companies were trying to promote competition amongst aircraft manufacturers before the sector further consolidated with Airbus buying Bombardier’s C Series and Boeing proposing a majority stake in Embraer’s commercial division. That firmly leaves the aircraft pipeline, excluding the long-term emergence of China and Russia, to an Airbus-Boeing duopoly.

It is a calculated risk for a 737 MAX buyer to sue Boeing. No matter how right the purchaser is found to be, it risks infuriating Boeing in a best case scenario. Worse is the lawsuit against Boeing from Dublin-based lessor Timaero Ireland Ltd., a subsidiary of Russia’s state-owned VEB Leasing JSC.

Timaero claimed to the federal court in Chicago this month that Boeing in this 737 MAX crisis was motivated by greed, knowingly committed fraud, has “rendered the aircraft worthless,” and “the public has lost complete confidence in the safety of the 737 MAX.”

Besides seeking $185 million in damages for its order book of 22 MAXs, Timaero asks for unspecified compensation for lost profit, and for punitive damages to be calculated at three times the amount of compensatory damages.

Timaero also wants its contract with Boeing cancelled. Airbus, knowing it is the only alternative, might not have to price so aggressively. Loss of negotiating leverage on future aircraft orders is not the sole downside for 737 MAX buyers considering legal action against Boeing. They worry about the Boeing aircraft they already operate and which will need the airframer’s support for years and potentially decades to come.

Some concerns: Boeing support not covered under contract may not eventuate, or be given at a high price. This covers not just engineering work but also other areas including regulatory, legal and if the aircraft changes owner. Previously contracted support may be provided at the minimal level of service while taking the maximum length of time permitted.

The sector is paying more attention to aftermarket support with a flurry of activity, including Boeing in 2017 establishing its own aftermarket division, Boeing Global Services, which aims to grow revenue from $14.6 billion to $50 billion within a decade. Boeing Global Services CEO Stan Deal was made CEO of Boeing Commercial Airplanes in October, replacing Kevin McAllister.

Airlines ranging in size from Southwest to Icelandair have reached compensation agreements with Boeing. There are reports numerous airlines and lessors are unhappy with Boeing offering minimal compensation, preferring to give a discount on future orders rather than upfront cash, and that Boeing is discouraging lawsuits with the quip that only lawyers win. Turkey’s Demirören said Turkish Airlines was preparing a lawsuit.

Timaero makes statements Boeing has already agreed with or which could be fair. But there are also sweeping views Boeing may find contentious. Rather than the lawsuit be a formula for more MAX buyers suing Boeing, Timaero may be an outlier due to its unique commercial situation.

There is a view lessors over-ordered aircraft at the peak of the recent cycle and were eager to reduce their backlog prior to the MAX crisis. Timaero has further challenges. Parent owner VEB in 2014 placed an order for 20 MAXs, which it planned to lease to Transaero, the Russian airline that went out business in 2015. That left VEB exposed to the 20 MAXs and an order for 20 Airbus A320neos that VEB also planned to lease to Transaero. VEB increased its MAX order to 22 in 2016 by converting two 737 NGs to MAXs. Russian media say VEB made pre-delivery payments, at least 10% of contract price, on all 42 aircraft.

Timaero has received only two MAXs, at least one of which is leased to Eastar Jet in Korea via VEB. Eastar has encountered financial problems from the MAX grounding as well as the wider changes in the Korean market as a result of a downturn in travel to Japan and weaker consumer sentiment from the strengthening Korean won. Rival Jeju Air agreed in December to buy 51% of Eastar.

Timaero may be willing and able to cancel its MAX order, recoup pre-delivery payments and perhaps other costs. But other lessors as well as airlines need to receive the best outcome while continuing to have competition between Airbus and Boeing.

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Source: The Problem With Suing Boeing For Its 737 MAX: Consequences

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Last week the Aircraft manufacturer Boeing’s apologised for two deadly crashes involving its 737 MAX model. This week a group of Indonesians whose relatives were killed in the first crash is going to be suing Boeing for compensation. An Ethiopian Airlines 737 MAX 8 crashed shortly after take-off on March 10, killing all 157 people on board. The same Boeing model was involved in a Lion Air plane crash in Indonesia in October that killed 189 people. To give us a sense of what these developments mean for the planemaker we are now joined by aviation expert from Fraymedia Desmond Latham. For more news, visit: sabcnews.com

 

Boeing Loses Patience With Muilenburg, But Calhoun May Be No More Than A Short-Term Fix As CEO

Amid mounting criticism over CEO Dennis Muilenburg’s handling of the 737 MAX crisis, Boeing on Monday said that he would be replaced by chairman and longtime board member David Calhoun.

While Calhoun may do a better public relations job than Muilenburg, some observers questioned whether he represents a real change in direction for the embattled company.

CFO Greg Smith will serve as interim CEO until Jan. 13 while Calhoun exits non-Boeing commitments.

“The Board of Directors decided that a change in leadership was necessary to restore confidence in the Company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders,” the company said in a statement.

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The move comes nine months after global aviation safety regulators grounded the 737 MAX, Boeing’s best-selling plane, after the second of two deadly crashes. Muilenburg has been faulted for a leaden public response to the crisis, angering the families of the deceased, lawmakers and members of the public with his reluctance to acknowledge that faults with the plane’s flight control system were responsible for the crashes, which killed 346.

Under Muilenburg’s leadership, Boeing repeatedly promised airlines and investors that it was near winning approval for fixes for the flight control system and other changes that would allow the plane to return to service.

Two weeks ago, Muilenburg was upbraided by FAA Administrator Stephen Dickson, who summoned Boeing’s CEO to a meeting in Washington to address concerns that the company was attempting to publicly pressure the agency to move more quickly.

Last week, Boeing announced it would halt 737 production in January, with roughly 400 planes in storage that it had produced since March that it has been unable to deliver to customers.

Calhoun is well-respected, having spent 26 years as an executive at Jack Welch-era General Electric, including a stint running the aircraft engines unit, and he helped guide Caterpillar through a delicate time recently as chairman of the board when the heavy machinery maker was under investigation by the IRS over its accounting and facing troubles in China.

A much more comfortable speaker, Calhoun should be a more effective face for the company than Muilenburg with Congress and the public, and help improve its strained relationship with airlines and the FAA.

While that might be a solution for Boeing’s short-term problems, Richard Aboulafia, an aerospace analyst with Teal Group, cautions that Calhoun’s recent experience doesn’t lend confidence that he has the skills Boeing needs long-term. Calhoun has spent the past five years in private equity as a managing director at Blackstone Group, and before that eight years as head of the market research firm Nielsen. “[It] is perhaps the wrong toolkit for an engineering company that needs to restore its capabilities and reputation,” he says.

Given that Calhoun has been on Boeing’s board since 2009, it’s questionable whether he can offer a fresh approach, analyst Ronald Epstein of Bank of America/Merrill Lynch wrote in a client note. “We wonder if appointing from within, especially an insider that has been with the company for 10 years, signals more of the same from Boeing vs. an outside appointee who may have offered more of a change of pace and culture.”

Calhoun, who was appointed chairman in October when the title was stripped from Muilenburg, will be replaced as chairman by Lawrence Kellner, a board member since 2011 who was CEO of Continental Airlines from 2004 through 2009.

Boeing has a mandatory retirement age of 65 and Calhoun is 62. While the board could be amenable to giving Calhoun an extension, CFO Smith may be in position to take the job eventually, says Jeffrey Sonnenfeld, a professor at the Yale School of Management. “This gives him runway to be an appropriate successor.”

Boeing shares rose 2.9% to close at $337.55 on Monday on the New York Stock Exchange.

It’s an abrupt end for Muilenburg, who spent his entire 34-year career at Boeing, starting as an intern and rising to run the defense division before he was tapped to become CEO in 2015.

Until this spring, Boeing seemed to be going from strength to strength on Muilenburg’s watch, riding a boom in aircraft orders amid a historic expansion in air travel. Like his predecessors Jim McNerney and Harry Stonecipher, Muilenburg rewarded shareholders handsomely, devoting roughly 95% of operating cash flow to the company’s steadily rising dividend and share buybacks. Boeing shares climbed fourfold from February 2016 to a peak of $446 at the beginning of March, compared with a 63% rise for the Dow industrials over the same period.

However, critics have charged that the focus on financials has served to erode the primacy that engineering concerns used to have at the company.

The seeds of the 737 MAX crisis were sown well before Muilenburg was involved with the commercial airplanes division, with the decision in 2011 by Boeing to develop an updated version of the aging 737 with larger, more efficient engines rather than build an all-new single-aisle plane. Those larger engines changed how the 737 handled, prompting Boeing to develop software called the maneuvering characteristics augmentation system (MCAS) to automatically push the plane’s nose down in certain situations. MCAS’ design flaws are believed to be primary causes of the two deadly crashes in Indonesia and Ethiopia.

However, Boeing’s response to the crisis has been seen as squarely Muilenburg’s responsibility. He came under fire for public statements that were seen as scripted, lawyerly and lacking in empathy for the families of the deceased. Airlines and regulators have accused Boeing of being slow to share information, including the fact that the company knew in 2017 that an alert wasn’t working on most MAX aircraft that was intended to warn of a disagreement between the plane’s angle of attack sensors, which played a key role in the crashes.

It’s indicative of a corporate identity that under Muilenburg’s leadership “has been less than humble,” analyst Robert Stallard of Vertical Research wrote in a client note Monday, pointing also to the decision to raise production of the 787 Dreamliner to 14 planes a month, which has been walked back, and a strategy that seemed to assume that the historic boom-bust pattern of the aerospace sector is a thing of the past.

Muilenburg was widely seen as on his way out, with the ideal scenario being that he would depart sometime after the 737 MAX had returned to service. But with commentators increasingly calling for Muilenburg’s head last week following the announcement that the company would idle 737 production, the company suffered a stinging embarrassment Friday when a test launch of its Starliner space capsule went awry. Because a timer was set incorrectly, it was unable to reach an orbit to rendezvous as planned with the International Space Station.

The union representing Boeing engineers welcomed the leadership transition, saying in a statement that under Muilenburg, the company’s reputation for quality had “been unquestionably tarnished.”

Michael Stumo, who has become a prominent critic of Boeing since his daughter Samya Stumo’s death in the Ethiopia crash, said, “Mr. Muilenburg’s resignation is a good first step toward restoring Boeing to a company that focuses on safety and innovation.” He called for “underperforming or underqualified” board members to resign as well.

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CNBC’s Phil LeBeau reports that Boeing’s board removed CEO Dennis Muilenburg as chairman so he can focus on running the company after the 737 Max crisis.

 

 

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