A House committee’s report released Wednesday found that the two deadly Boeing 737 Max crashes were caused by a series of failures at the company and federal regulators. Boeing (BA) stock reversed higher.
The House Committee on Transportation and Infrastructure’s 245-page report that was 18-months in the making found that “Boeing failed in its design and development of the MAX, and the FAA failed in its oversight of Boeing and its certification of the aircraft.”
The crashes “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 FAA — the pernicious result of regulatory capture on the part of the FAA with respect to its responsibilities to perform robust oversight of Boeing and to ensure the safety of the flying public.”
Problems with the Maneuvering Characteristics Augmentation System (MCAS) automated flight-control software contributed to the Ethiopian Air crash in March 2019 as well as the October 2018 Lion Air crash. Combined, the two crashes killed 346 people.
The House report found that Boeing made “faulty design and performance assumptions” about MCAS and that the planemaker presented the system as a modification of the plane’s existing speed trim system.
The Boeing 737 Max received a derivative certification from the Federal Aviation Administration. But with the increase in software and sensors on the plane, lawmakers have questioned if the 737 Max should have required a new certificate.
FAA Failures On Boeing 737 Max
Boeing stock erased early losses to rise 3% to 168.19 on the stock market today, continuing to hit resistance at the 50-day line, according to MarketSmith chart analysis. Boeing 737 Max supplier Spirit AeroSystems (SPR) rallied 4.8%, and engine maker General Electric (GE) jumped 10% on a more bullish cash flow outlook.
Meanwhile, the FAA “failed to ensure the safety of the traveling public,” in part due to relying on Boeing to complete certification work, the House report said.
Boeing’s rivalry with Europe’s Airbus (EADSY) in the key narrow-body jet market also led to problems with the 737 Max. Employee surveys found that some workers were under “undue pressure” to finish the plane. Engineers were expected to update the 737 Max quickly and inexpensively.
Last year, Members of the House unloaded a trove of damning new messages at a transportation hearing in October that laid out warnings from employees before the fatal crashes. And at a Transportation and Infrastructure Committee hearing in December, a former Boeing employee testified about 737 Max warnings he sent management that overworked employees were making mistakes.
Wednesday’s House committee report comes as U.S., Canadian and European aviation regulators completed recertification flights for the troubled jet.
Boeing CEO Dave Calhoun said that he expects approval from global regulators will be obtained in time to support the resumption of deliveries of the Boeing 737 Max during the fourth quarter.
Follow Gillian Rich on Twitter @IBD_GRich for aviation news and more.
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