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Tag: Boeing

  • Boeing to pay $200 million to settle charges of deception of investors over the 737 Max

    In response to allegations that it deceived investors about two fatal 737 Max crashes, Boeing will pay $200 million (£177.5 million).

    The US stock market regulator claimed that the aviation behemoth and its former CEO Dennis Muilenburg misrepresented safety-related issues.

    Boeing “put profits over people” in an effort to rehabilitate its image, according to the Securities and Exchange Commission (SEC).

    The 737 Max was grounded for 20 months after two crashes killed 346 people.

    As part of the settlement, Mr Muilenburg will also pay a penalty of $1m.

    “In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets,” SEC chairman Gary Gensler said in a statement.

    Boeing and Mr Muilenburg “failed in this most basic obligation,” he added.

    The SEC’s statement also said that both Boeing and Mr Muilenburg did not admit or deny the regulator’s findings.

    “We will never forget those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302, and we have made broad and deep changes across our company in response to those accidents,” Boeing said in response to the SEC’s announcement.

    “Fundamental changes that have strengthened our safety processes and oversight of safety issues, and have enhanced our culture of safety, quality, and transparency,” the company added.

    The SEC said a fund will be established for investors who suffered losses due to the misleading information between 2018 and 2019.

    This settlement is largely symbolic. The 737 Max scandal has already cost Boeing tens of billions – another $200m will barely register.

    But it does give the SEC the chance to call out Boeing and its ex-chief executive Dennis Muilenburg for making assurances about the plane’s safety, when they already knew it had a serious problem – thereby misleading investors.

    It’s unlikely this will cause Boeing any meaningful harm. Its corporate reputation had already been severely damaged by the affair. The company is now working hard to restore it, and regain public and investor confidence.

    For Mr Muilenberg himself, the financial consequences of the settlement won’t be that painful either. He received some $60m in compensation and benefits when he left the company. But the fact that the SEC chose to charge him personally sends out a powerful signal.

    There have been criticisms in some quarters that the ex-boss has not been properly held to account for his role in the affair. On this occasion, though, the finger has been pointed squarely in his direction.

    On 29 October 2018, Lion Air Flight 610 crashed into the Java Sea 13 minutes after taking off from Jakarta’s Soekarno-Hatta International Airport, killing all 189 passengers and crew.

    Less than five months later, Ethiopian Airlines Flight 302, another Boeing 737 Max on its way to Kenya, crashed six minutes after leaving Ethiopia’s capital Addis Ababa. All 157 people on board were killed.

    The crashes were linked to a flight control system called the “Maneuvering Characteristics Augmentation System” (MCAS) in the Boeing 737 Max.

    The SEC said that “after the first crash, Boeing and Mr Muilenburg knew that MCAS posed an ongoing airplane safety issue, but assured the public that the 737 Max was safe to fly.

    The crashes have cost Boeing more than $20bn, including payments to families of those killed in the crashes.

    In the wake of the incidents, the US Congress passed new legislation reforming how the country’s aviation regulator, the Federal Aviation Administration (FAA), certifies new planes.

    A small number of trials are expected to start next year to resolve outstanding claims.

  • Boeing 737 plane carrying more than 50 people missing after take-off

    A Sriwijaya Airplane with more than 50 people on board lost contact after taking off from Indonesian capital Jakarta on Saturday en route to Pontianak in West Kalimantan province, local media reported.

    Reliable tracking service Flightradar24 said on its Twitter feed that Flight SJ182 “lost more than 10,000 feet of altitude in less than one minute, about 4 minutes after departure from Jakarta”.

    The aircraft is a 27-year-old Boeing 737-500, according to registration details included in the tracking data.

    Sriwijaya Air, an Indonesian airline, said in a statement it is still gathering more detailed information regarding the flight before it can make any statement.

    Source: www.reuters.com

  • Last Qantas 747 flight draws iconic kangaroo in the sky on its final journey from Australia

    After 50 years of flying, Qantas’ last remaining Boeing 747 passenger jet departed Australia for the final time on Wednesday and left a special message for everyone in the sky — a drawing of the airline’s iconic kangaroo logo.

    The flight path of Flight QF7474 traced the logo in the sky after it took off from Sydney Airport for the US, where the jumbo jet will be retired, Qantas, Australia’s biggest airline, said in a statement on Wednesday.

    “This aircraft was well ahead of its time and extremely capable,” said Qantas Group CEO Alan Joyce in a statement. “Engineers and cabin crew loved working on them and pilots loved flying them. So did passengers. They have carved out a very special place in aviation history and I know they’ll be greatly missed by a lot of people, including me.”

    The 747 is being replaced by more fuel-efficient aircraft with better range, like the 787 Dream liner and the Airbus A350, according to Joyce. While the fleet was set to be retired this year, Qantas said the pandemic decimated travel globally, which moved up the retirement by six months.

    The travel industry has taken a huge hit as countries have gone on lockdown and limited traveling to curb the spread of COVID-19. Earlier this month, British Airways retired its fleet of 747s four years ahead of schedule because of the pandemic.

    Bidding farewell

    People gathered at Sydney Airport to bid farewell to the plane, which received a water salute before departure. The plane was loaded with cargo bound for Los Angeles before the aircraft goes into storage at a boneyard in the Mojave Desert, according to the Qantas press release.

    Joyce said it is hard to overstate the impact the 747 had for a country like Australia. The aircraft’s size helped lower airfares for a nation that is far away as Australia.

    The 747 “put international travel within reach of the average Australian and people jumped at the opportunity,” Joyce said.
    The flight was commanded by Capt. Sharelle Quinn, the airline’s first female captain.

    “I have flown this aircraft for 36 years and it has been an absolute privilege,” Quinn said in the press release.

    Quinn said 747s have carried more than 250 million passengers for Qantas, including a number of rescue missions for Qantas over the past 50 years. The plane brought home a record 674 passengers out of Darwin following Cyclone Tracy in 1974 and flew medical supplies in and tourists home from the Maldives and Sri Lanka following the massive tsunami in December 2004.

    Most recently, it was used in February to bring hundreds of stranded Australians home from Wuhan, China, where the novel coronavirus pandemic began.

    Qantas took delivery of its first 747 in August 1971, the same year the first McDonalds opened in Australia, according to the airline.
    “It has been a wonderful part of our history, a truly ground-breaking aircraft and while we are sad to see our last one go, it’s time to hand over to the next generation of aircraft that are a lot more efficient,” Quinn said.

    Before heading out over the Pacific Ocean, Qantas said that the flight was scheduled to fly by Sydney Harbor and the HARS Museum where it will dip the wings in a final farewell to Qantas’ first 747-400, which is on display there.

    Source: cnn.com

  • Boeing takes Embraer to arbitration over failed aviation deal

    Boeing Co (BA.N) has taken former partner Embraer SA (EMBR3.SA) to arbitration over a failed $4.2 billion deal, the Brazilian planemaker said in a securities filing on Monday night.

    So far, it has only been publicly known that Embraer had taken Boeing to arbitration, angered by how the U.S. planemaker abruptly broke off that deal in April after years of working together.

    Boeing did not immediately respond to a request for comment.

    Source: reuters.com

  • Boeing to reduce workforce by 10% as coronavirus batters airline industry

    Boeing announced sweeping cost-cutting measures Wednesday as it reported a first-quarter loss of $641 million after suffering a damaging hit to the airline business from the coronavirus pandemic.

    The aerospace giant plans to reduce its workforce by 10 percent through voluntary and involuntary layoffs, Chief Executive David Calhoun said in a message to employees that accompanied an earnings release.

    Boeing also will slash production of its main commercial planes, including the 787 and 777.

    “The aviation industry will take years to return to the levels of traffic we saw just a few months ago,” Calhoun said. “We have to prepare for that.”

    Calhoun said the job cuts would be deeper — more than 15 percent — in the commercial airplane and services divisions, as compared with defense and space systems, where business has been more stable.

    The company had 160,000 employees prior to the announcement, putting the downsizing at about 16,000 jobs.

    The quarterly loss of $641 million compared to profits of $2.1 billion in the same three-month period a year ago. Revenues fell 26.2 percent to $16.9 billion.

    And total debt at the end of the quarter had swelled to $38.9 billion, up from $27.3 billion at the end of December.

    Calhoun said the belt-tightening was needed to maintain adequate liquidity at a time when revenues are depressed, adding that the company is “exploring potential government funding options” in the wake of the COVID-19 crisis.

    Shares rallied following the announcements, including Boeing’s statement that it “will be able to obtain sufficient liquidity to fund its operations.”

    Potential US government aid

    Boeing has previously called for $60 billion in government support for the US aerospace industry. The federal CARES Act stimulus package included $17 billion aimed at the company.

    Calhoun said the company would weigh potential support from the US Treasury against private sources, noting that credit markets have improved since the CARES Act was passed and as the Fed moves to inject cash into the system.

    “We’re going to evaluate all these options,” Calhoun said Wednesday in an interview with CNBC.

    “We need liquidity.”

    Executives also said the company hopes to maintain its investment-grade credit rating.

    Late Wednesday, S&P again downgraded the company’s credit ratings one notch, citing a bigger cash outflow than previously expected.

    However, Boeing, which was also downgraded in December and March, is still investment grade under the S&P rubric.

    Factors in the first-quarter loss included “abnormal production costs” connected to the temporary suspension of Washington state manufacturing operations due to COVID-19 and the suspension of production of the 737 MAX, which has been grounded worldwide for more than a year following two deadly crashes.

    Boeing said the pandemic has hit demand for new planes and services, with airlines delaying purchases of jets, slowing delivery schedules and deferring elective maintenance.

    The company this year will cut production of the 787 to 10 a month from 14, and gradually reduce that to seven a month by 2022. It also will trim output of the 777 and lower its targets for the 737 MAX.

    “We have done a tremendous job of increasing our production rates and services offerings in recent years,” Calhoun said.

    “But the sharp reduction in our demand for our products and services over the next several years simply won’t support the higher levels of output.”

    Job cuts

    Regarding the job cuts, the company notified 70,000 workers they were eligible for voluntary departures.

    Calhoun said involuntary departures are “likely,” but the outcome will depend on how many workers step forward within the next few weeks.

    “We are hoping to get a reasonably large number out of that for no other reasons than to minimize the number of involuntary” job cuts, Calhoun said.

    Calhoun told CNBC the company has made progress with regulators on the MAX, but that “there is still a mountain of documents that have to be completed.”

    The jet has been grounded since March 2019 following two crashes that killed 346 people.

    On a conference call with analysts, Calhoun said the company expects to resume MAX deliveries in the third quarter. Boeing currently has some 450 MAX planes in storage.

    Calhoun said MAX customers have varied in their preference for delivery, with some seeking to push back and others wanting the plane as soon as possible.

    The CEO expects the coronavirus crisis to prompt more airlines to retire older planes and seek newer models that, like the MAX, are more fuel-efficient.

    Boeing’s share price jumped 5.9 percent to close at $139.

    Source: france24.com

  • Boeing extends factory shutdown in Washington state

    Boeing has said it will indefinitely extend a shutdown at its factories in Washington state because of the coronavirus pandemic.

    The aerospace giant had already halted production at its Puget Sound facility near Seattle, where the company builds the long-range 777 jet and other models, after announcing a two-week stoppage last month.

    It had also shut its other major state factory at Moses Lake because of the 737 MAX grounding.

    Boeing announced Sunday that the shutdown would continue indefinitely in an effort to protect staff from COVID-19, which has already claimed the life of one employee at the company’s Everett facility.

    “The health and safety of our employees, their families and our communities is our shared priority,” Boeing’s commercial airplanes division president Stan Deal said in a statement.

    Boeing was already facing significant headwinds prior to the coronavirus pandemic because of the crisis surrounding the 737 MAX, which has been grounded for more than a year following two fatal crashes.

    But the pandemic has further hit the company’s outlook with most commercial airline travel suspended and major carriers thrust into a life-or-death fight.

    The company is seeking more than $60 billion in federal support for the US aerospace industry in the wake of the two crises.

    It announced a voluntary worker layoff plan on Thursday and said it expected “several thousand employees” to take a severance package or retire.

    Boeing currently employs around 70,000 people in Washington state.

    Source: France24

  • Ukrainian passenger plane crashes in Iran

    A Ukrainian Boeing-737 with 180 people onboard has crashed in Iran, according to local media.

    Iran’s Red Crescent said there is no chance of finding survivors.

    Read:Iran: Cargo plane crashes with at least nine on board

    The aircraft belonging to Ukraine International Airlines crashed just after take-off from Iran’s Imam Khomeini airport in Tehran, said the Fars state news agency.

    Preliminary reports suggest that the plane was en route to the Ukrainian capital of Kyiv.

    Read:Plane crashes into California house killing five

    It is unclear whether the incident is linked to the Iran-US confrontation.

    Rescue teams have been sent to the area, near the airport, where the aircraft crashed.

    “The plane is on fire but we have sent crews … and we may be able to save some passengers,” Pirhossein Koulivand, head of Iran’s emergency services, told state television, according to Reuters news agency.

    Source: bbc.com

  • Boeing: US regulator admits ‘mistake’ over aircraft crashes

    US aviation regulators allowed Boeing’s 737 Max aircraft to continue flying despite knowing there was a risk of further crashes.

    Analysis after the first crash last year predicted there could be up to 15 disasters over the lifetime of the aircraft without design changes.

    Despite this, the Federal Aviation Administration did not ground the Max until a second crash five months later.

    FAA chief Steve Dickson, who started in August, said this was a mistake.

    The FAA risk assessment was revealed during a US congressional hearing on Wednesday. Lawmakers are investigating Boeing following fatal 737 Max crashes in Indonesia in October 2018, and Ethiopia in March. The disasters killed 346 people in total.

    Read:[Update] Ethiopian Airlines crash: No survivors on Boeing 737

    Air safety officials investigating the crashes have identified an automated control system in the 737 Max 8, known as MCAS, as a factor in both accidents.

    Boeing has said the system, which relied on a single sensor, received erroneous data, which led it to override pilot commands and push the aircraft downwards.

    The FAA’s investigation of the October Indonesia crash called for Boeing to redesign its system, warning of a risk of more than a dozen crashes over the 45-year lifetime of the roughly 4,800 737 Max planes in service.

    Regulators also issued an alert to airlines, but the agency did not ground the aircraft until after the 10 March Ethiopia crash, several days after action by other countries.

    “Was a mistake made?” asked Democrat congressman Henry Johnson.

    Read:Boeing: UK joins wave of countries grounding the 737 Max

    “Obviously the result was not satisfactory,” said Mr Dickson. In response to later questions, he admitted the agency had made a mistake at some point in the process.

    ‘Grave concerns’

    Boeing is revising the MCAS software, but lawmakers say their investigation has shown that the aircraft manufacturer was aware of flaws in the system.

    Boeing staff have also raised concerns that the company was prioritising speed over safety at the factory that produced Max 737s, contributing to the crashes.

    Ed Pierson, a former senior manager at the factory, told Congress he repeatedly warned Boeing’s leadership of the safety risks caused by what he described as a “factory in chaos”, but it had little effect.

    Read:Former Boeing employee who warned about 737 problems will testify at hearing

    He also said that, after the crashes, US government regulators have shown little interest in his concerns.

    “I remain gravely concerned that… the flying public will remain at risk unless this unstable production environment is rigorously investigated and closely monitored by regulators on an ongoing basis,” he said in prepared testimony.

    Mr Dickson said the FAA is probing production issues. He also said he is considering further actions against Boeing.

    In a statement, Boeing said Mr Pierson’s own account showed the company took his concerns seriously.

    “Company executives and senior leaders on the 737 programme were made aware of Mr Pierson’s concerns, discussed them in detail, and took appropriate steps to assess them,” it said.

    Source: www.bbc.com