FAA proposes Boeing 737 MAX’s return with changes in design

The US Federal Aviation Administration (FAA) is proposing requiring four key Boeing Co 737 MAX design and operating changes to address safety issues seen in two fatal crashes that led to the plane’s grounding in March 2019.

The agency is issuing a proposed airworthiness directive to require updated flight-control software, revised display-processing software to generate alerts, a revision of certain flight-crew operating procedures and changes in the routing of some wiring bundles.

While the measures align with those expected by Boeing and aerospace analysts for months, the announcement comes after a series of delays and sets in motion the final sequence of events that could lead to the FAA lifting a grounding order on the plane later this year.

There are still a number of hurdles, including collecting public comments on the changes for 45 days, and finalizing a new set of pilot-training procedures. Transport Canada and Europe’s EASA have their own concerns.

Given the work left, it remains unclear whether U.S. flights will resume before year-end.

Boeing shares closed 2.7% higher on Monday, while the Dow Jones Industrial Average was up nearly 1%.

In response to the FAA’s proposal, Chicago-based Boeing said it was “continuing to make steady progress towards the safe return to service, working closely with the FAA and other global regulators.”

The FAA said in a separate 96-page report on Monday it “has preliminarily determined that Boeing’s proposed changes to the 737 MAX design, flightcrew procedures and maintenance procedures effectively mitigate the airplane-related safety issues.” The airworthiness directive seeks to require Boeing changes.

The crisis over the grounding of the once top-selling 737 MAX has cost the U.S. planemaker more than $19 billion, slashed production and hobbled its supply chain, with criminal and congressional investigations still ongoing.

The FAA’s review has taken more than 18 months and included more than 40 full-time engineers, inspectors, pilots, and technical support staff. To date, the FAA has conducted more than 60,000 hours of review, certification testing, and document evaluation.

The agency is also proposing that 737 MAX operators conduct an Angle of Attack (AOA) sensor system test and perform an operational readiness flight before returning airplanes to service. The changes are designed to prevent the erroneous activation of a key system known as MCAS tied to both crashes, to alert pilots if two AOA sensors are receiving conflicting data and to ensure flightcrew can respond to erroneous stabilizer movement.

The FAA said the changes minimize “dependence on pilot action and the effect of any potential single failure”.

The wiring change will ensure the MAX complies with FAA’s wire separation safety standards.

Meanwhile, Germany-based holiday company TUI said it agreed a sale and leaseback deal for five new Boeing 737 MAX-8 aircraft with BOC Aviation, raising $226 million to help boost its finances.

COVID-19 has wiped out air travel for Europeans for months, and now the threat of a resurgence in infections and new restrictions are causing more pain for airlines.

TUI has said it needs to cut 8,000 jobs and shed 30% of its costs to prepare for a smaller tourism market.

The company said on Monday that the sale and leaseback deal, which applies to aircraft it will receive next year, was part of its “asset right” approach to ownership and it expected further sale and leaseback financing on its deliveries beyond 2021.

The agreement was on standard commercial terms, said TUI, and would create a lifetime lease obligation of around 223 million euros to begin at the end of its 2021 financial year.

During what has become the travel sector’s deepest crisis, BOC Aviation has struck an estimated $5.5 billion in deals with carriers including Southwest and United Airlines to buy and lease back aircraft on what it says is more favourable pricing than would have been available in a stronger market.

The chief executive of BOC Aviation, which is based in Singapore and listed in Hong Kong, has said he remains confident in the 737 MAX plane which has been grounded for more than a year pending regulatory approval following two crashes.

Last week, the crisis for TUI deepened when it said its UK unit was forced to cancel thousands of holidays after Britain advised against travel to Spain, bringing back a 14-day quarantine rule for returning travellers just 15 days after dropping the requirement.

Reuters