Boeing Co. and the U.S. Federal Aviation Administration are engulfed in a public rupture over a bombshell revelation about the 737 Max, and the timing couldn’t be worse -- just as the planemaker and the regulator are working to get the grounded jet back in the skies.
The feud centers on messages between senior Boeing pilots in late 2016, as the aircraft was in testing. One of the pilots recounted a rocky simulator trial of software known as the Maneuvering Characteristics Augmentation System, or MCAS, which would later play a role in two fatal crashes that killed 346 people. The handling performance was “egregious,” he said.
The FAA blasted Boeing on Friday for not sharing the transcripts, even though the company had discovered the instant messages months earlier. Boeing gave the documents to the Justice Department in February, the month before the second deadly accident, said a person familiar with the matter. But the company didn’t inform the FAA because the regulator is also a subject of the same criminal investigation.
The schism endangers an effort to rebuild public trust in the 737 Max and U.S. safety oversight after months of bruising publicity for both Boeing and the FAA. The commercial return of Boeing’s best-selling plane has slipped repeatedly and now isn’t likely before early 2020. The delays have cost the planemaker at least $8.4 billion so far, while jeopardizing the job of Boeing Chief Executive Officer Dennis Muilenburg.
“From a technical perspective, the revelation need not affect the timing but, in our view, there is a political/public relations aspect of returning the Max,” Seth Seifman, an analyst with JPMorgan Chase & Co. said in a note Friday. “Boeing, regulators, and carriers have to sell the technical and cultural changes credibly -- and while the impact is difficult to quantify, the news is negative.”
Boeing tumbled 6.8% to $344 at the close of trading Friday, the worst drop since February 2016 and the biggest decline on the Dow Jones Industrial Average. The plunge wiped out $14 billion of market value in a day.
Boeing sent the pilots’ messages to the Department of Transportation on Thursday evening, notifying officials that the exchange would be provided a day later to the House Transportation and Infrastructure Committee, which is conducting an investigation of the Max’s certification. The FAA provided its own version to the committee, and issued a public statement along with a terse letter to Muilenburg demanding more information.
“I understand that Boeing discovered the document in its files months ago,” FAA Administrator Steve Dickson said in the letter. “I expect your explanation immediately regarding the content of this document and Boeing’s delay in disclosing the document to its safety regulator.”
The FAA didn’t comment directly on whether the latest news would alter the schedule for certifying the plane to fly again. The agency said as recently as last week that any actions associated with the original approval of the plane aren’t relevant to the work it’s conducting now. Regulators have required Boeing to perform a new safety analysis of MCAS and is requiring multiple tests that weren’t done prior to the jet’s original certification in 2017.
Muilenburg called Dickson to respond to the concerns, Boeing said in a statement. Asked whether the Max’s comeback would be affected, company spokesman Gordon Johndroe said, “we’ll continue to follow the path to certification as currently outlined by the FAA.”