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Interested
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 3:25 pm

I believe estimates of the costs of the grounding so far increased to 25 billion us dollars yesterday
 
morrisond
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 3:32 pm

FluidFlow wrote:
morrisond wrote:
FluidFlow wrote:
Southwest says the grounding has cost it over 800 million dollars and for AA it seems to be around 540 million dollars. https://edition.cnn.com/2020/01/23/business/southwest-american-airlines-earnings/index.html

This is for around 8 months of grounding. If we add another 8 months until next August we have around 2.5 billion dollars from these two carriers alone and does not take into account the additional aircraft that should have been delivered in 2020.


SW is using some very creative accounting to get to that $828 Million loss.

Sorry but having more aircraft in the fleet would not be helping the Load Factor.

That is the big reason for the earnings miss.

They are saying the MAX grounding impacted Operating Earnings by $828 Million. On average they should have had about 50 MAX's flying for 9 months. There extra efficiency would not have generated an extra $1.4 Million of Operating income per month (about 4-5X the lease rate of a MAX) per frame.

If they have extra frames it arguably would just have added more capacity into the system and lowered yields further.

The most interesting quote from the press release is this:

"During fourth quarter, reached confidential agreement with The Boeing Company (Boeing) on compensation related to estimated 2019 financial damages due to the March 13, 2019, Federal Aviation Administration (FAA) order to ground the Boeing 737 MAX aircraft (MAX); substantially all of the compensation will be accounted for as a reduction in the cost basis of both owned MAX aircraft and future purchased MAX aircraft, which is expected to reduce depreciation expense in future years"

Which sounds like to me they just gave them a partial refund on the 34 already delivered and SW will just pay less for each frame going forward. That is a very small current cash cost for Boeing and what many of us on here were guessing would happen.


It is not really the actual cash loss that hurts Boeing but the MAX will become a really low profit program due to the issues:

Let's make a simple calculation. Boeing sells 5000 Max. After discount the MAX costs around 50m$. If we assume an average profit margin of 15% the profit on the complete MAX-Program is around 37.5 billion dollars. Costs of the MAX grounding is right now estimated in the order of 20 billion dollars.

The crisis right now cuts the profit on the MAX-Program more than in half. Boeing will still make profits and undoubtedly will weather the MAX fiasco but it is a hefty cut in profits over the next years.


Yes - agreed - I have come up with similar type of guesses on profits.

However I think they will most likely end up at 7-8,000 sold (at least) before a replacement happens and then you have to add in all the profit they will make on parts and services for the life of the program as well.

It will take them down to Airbus like levels of Margins on the program.
 
FluidFlow
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 3:40 pm

morrisond wrote:
FluidFlow wrote:
morrisond wrote:

SW is using some very creative accounting to get to that $828 Million loss.

Sorry but having more aircraft in the fleet would not be helping the Load Factor.

That is the big reason for the earnings miss.

They are saying the MAX grounding impacted Operating Earnings by $828 Million. On average they should have had about 50 MAX's flying for 9 months. There extra efficiency would not have generated an extra $1.4 Million of Operating income per month (about 4-5X the lease rate of a MAX) per frame.

If they have extra frames it arguably would just have added more capacity into the system and lowered yields further.

The most interesting quote from the press release is this:

"During fourth quarter, reached confidential agreement with The Boeing Company (Boeing) on compensation related to estimated 2019 financial damages due to the March 13, 2019, Federal Aviation Administration (FAA) order to ground the Boeing 737 MAX aircraft (MAX); substantially all of the compensation will be accounted for as a reduction in the cost basis of both owned MAX aircraft and future purchased MAX aircraft, which is expected to reduce depreciation expense in future years"

Which sounds like to me they just gave them a partial refund on the 34 already delivered and SW will just pay less for each frame going forward. That is a very small current cash cost for Boeing and what many of us on here were guessing would happen.


It is not really the actual cash loss that hurts Boeing but the MAX will become a really low profit program due to the issues:

Let's make a simple calculation. Boeing sells 5000 Max. After discount the MAX costs around 50m$. If we assume an average profit margin of 15% the profit on the complete MAX-Program is around 37.5 billion dollars. Costs of the MAX grounding is right now estimated in the order of 20 billion dollars.

The crisis right now cuts the profit on the MAX-Program more than in half. Boeing will still make profits and undoubtedly will weather the MAX fiasco but it is a hefty cut in profits over the next years.


Yes - agreed - I have come up with similar type of guesses on profits.

However I think they will most likely end up at 7-8,000 sold (at least) before a replacement happens and then you have to add in all the profit they will make on parts and services for the life of the program as well.

It will take them down to Airbus like levels of Margins on the program.


Yeah they probably can sell more I just did not want to use possible numbers. 5000 are almost guaranteed. Every thing else will also depend a bit on possible launches of other types, economical changes etc. If NMA comes it might hurt the -10 for example a lot. Also depending on when new frames are in, the MAX might already hit "end of line" discounts in 2027. So we will see...
 
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 4:54 pm

Checklist787 wrote:
Revelation wrote:

“This was a very unusual group of folks using horrible language,” Calhoun said.

So, is he saying he knows this to be true because there has been an investigation, or he merely hopes that this is true?



D. Calhoun seems to be a diplomat but in reality (I am going to the dark side and I would stay there), that the FAA is really monkeys in ties incapable of certifying an aircraft!

At the rate that it, it will not be until next September or October or 2022. I UNDERSTAND the exchange of employee emails now.

The FAA is zealous it is an anvil, a disaster for everyone!

They are there cause of this crisis while Boeing had,

- Identified the problem,
- Solved it,
- Made concession to pass in simulators

... And the FAA takes the nap (AGAIN) after having ingested some bananas at lunch...

And the earth is flat and covered by a glass dome where the sun and moon are inside it too...

Seriously the only quotations we have from the Boeing employees regarding the FAA are the ones where I believe it was Forkner saying he “Jedi mind-tricked” them. That’s it. No monkeys, no bananas, and no anything else.
Been on: 732 733 734 73G 738 752 763 A319 A320 A321 CRJ CR7 CRA/CR9 E145 E175 E190 F28 MD-82 MD-83 C172R C172S P2006T PA-28-180

2 ears for spatial hearing, 2 eyes for depth perception, 2 ears for balance... How did Boeing think 1 sensor was good enough?!
 
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 5:17 pm

Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter. And with regards to the NMA/MOM, he says Boeing is "starting over" and shelving the already developed plans. Instead they will focus on China, whatever that means.

"Speaking from Boeing Commercial Airplanes headquarters at Longacres in Renton on a two-day visit to the area ahead of Friday’s expected first flight of the 777X, Calhoun acknowledged the design of the MAX’s new flight control system was flawed, but insisted that was not a product of any deliberate decision to put cost factors ahead of safety.

Instead, he said, the flaws came from long-standing assumptions about how pilots would react to a failure —assumptions that proved fatally wrong."


From the Seattle Times interview, already posted in the News thread. But we have to be able to link news and talk about it in this thread, since the other is strictly a news feed.

https://www.seattletimes.com/business/b ... estore-it/
 
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 5:29 pm

13 May 2019: Ethiopian Airlines CEO "We strongly believe that entire flight control system needs to be reviewed"
8 months later...
23 January 2020: Boeing CEO "acknowledged the design of the MAX’s new flight control system was flawed"
Finally !
We will see when the "even safer" design will be operational.
:stirthepot: 737-8 MAX: "For all speeds higher than 220 Kts and trim set at a value of 2.5 units, the difficulity level of turning the manual trim wheel was level A (trim wheel not movable)." :stirthepot:
 
Interested
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 5:29 pm

JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter. And with regards to the NMA/MOM, he says Boeing is "starting over" and shelving the already developed plans. Instead they will focus on China, whatever that means.

"Speaking from Boeing Commercial Airplanes headquarters at Longacres in Renton on a two-day visit to the area ahead of Friday’s expected first flight of the 777X, Calhoun acknowledged the design of the MAX’s new flight control system was flawed, but insisted that was not a product of any deliberate decision to put cost factors ahead of safety.

Instead, he said, the flaws came from long-standing assumptions about how pilots would react to a failure —assumptions that proved fatally wrong."


From the Seattle Times interview, already posted in the News thread. But we have to be able to link news and talk about it in this thread, since the other is strictly a news feed.

https://www.seattletimes.com/business/b ... estore-it/


The new CEO won't last 12 months

Why bother replacing the old one?

Same old BS

At some stage someone external with knowledge of the real world and how to gain trust etc will be appointed to pick up pieces of an even bigger mess

Mark my words

Boeing haven't learnt a single thing from what's happened so far
 
hivue
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 5:53 pm

JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter.


:checkmark: This sounds way too Muilenberg-esque for me. The contents of the last batch of internal communications released is not consistent with this. Don't forget the RCAS system they revealed that was introduced on the MAX, and in order to justify "grandfathering" it Being had airline customers do retrospective token installs of RCAS on some NGs. All of this kind of stuff was done to make the airplane financially attractive to their airline customers.
"You're sitting. In a chair. In the SKY!!" ~ Louis C.K.
 
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Carlos01
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:06 pm

IMHO, Boeing is not actually the only evil company in this world. It somehow seems that nearly all large corporations have somehow lost connection to any kind of humane thinking, by taking their cost savings to an absolute extreme, in order to maximise their profit. All the big boys take the same courses how to attack against any type of regulating bodies (internal and external), and then go after their profit -based bonuses. I work for a large multinational corporation, and over the past few years I've had several discussions with very high ranking dudes, who are just absolutely nuts. Just last week, one wrote to me, asking do I seriously expect him to spend hundreds of thousands just to fix the issue that my team raised? Employees are not being treated fairly, not even humanely, and there is a high risk of injuries, even fatalities. And this guy shrugs it off just because it costs a couple of hundred thousands to fix it - really pennies for our company.

I can imagine the exact same thinking caused the MAX to be where it is today. And I agree with some of the posters here, I am still not reading between the lines that anything would be fundamentally changing. Just too much greed. Too much "just a little more for me".
Last edited by Carlos01 on Thu Jan 23, 2020 6:09 pm, edited 1 time in total.
 
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JetBuddy
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:07 pm

hivue wrote:
JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter.


:checkmark: This sounds way too Muilenberg-esque for me. The contents of the last batch of internal communications released is not consistent with this. Don't forget the RCAS system they revealed that was introduced on the MAX, and in order to justify "grandfathering" it Being had airline customers do retrospective token installs of RCAS on some NGs. All of this kind of stuff was done to make the airplane financially attractive to their airline customers.


That is exactly right.

Boeing tried to cheat the system by introducing RCAS on the NG just prior to the MAX. It provided the argument that it was a "grandfathered" design and was not a change from previous models. Purely for cost cutting reasons.

Calhoun is a liar.

We need to have a long, hard discussion about the certification rules in the aviation industry as a whole after this MAX debacle has settled. Unfortunately, Transport Secretary Chao has already warned against changing the rules too much.
 
TaromA380
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:11 pm

JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter. And with regards to the NMA/MOM, he says Boeing is "starting over" and shelving the already developed plans. Instead they will focus on China, whatever that means.

"Speaking from Boeing Commercial Airplanes headquarters at Longacres in Renton on a two-day visit to the area ahead of Friday’s expected first flight of the 777X, Calhoun acknowledged the design of the MAX’s new flight control system was flawed, but insisted that was not a product of any deliberate decision to put cost factors ahead of safety.

Instead, he said, the flaws came from long-standing assumptions about how pilots would react to a failure —assumptions that proved fatally wrong."


From the Seattle Times interview, already posted in the News thread. But we have to be able to link news and talk about it in this thread, since the other is strictly a news feed.

https://www.seattletimes.com/business/b ... estore-it/

What would you like Calhoun to say? His job is to sell the world purposely this version of the story.

Were you expecting a knight in shining armour defending the good and the truth, instead of a beans counter surrounded by lawyers counselors :confused:
Last edited by TaromA380 on Thu Jan 23, 2020 6:14 pm, edited 1 time in total.
 
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:13 pm

"Boeing surprised us all this week" with its new mid-summer Max return schedule, @SouthwestAir CEO Gary Kelly says.

So dont bother briefing your largest customer ??
Either arrogance or incompetence, not a good start for the new CEO.
 
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par13del
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:22 pm

astuteman wrote:
I saw Boeing forwarding all of the "clowns and monkeys" documents voluntarily to the FAA, and Calhoun backing off from optimistic forecasts of return to service that seemed at odds with the FAA as signs that the corner was being turned.
Rgds

I am thinking he is regretting that as of now, the way to regain the trust of the FAA is by hard work, not by throwing your organization under the bus, especially when in the job market that exist in the USA, they cannot clean house of all the superior humans.
I would not be shocked if the 787 initial design and production model is started again all in the name of regaining trust in the Boeing brand.

Time will tell.
 
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Revelation
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:27 pm

hivue wrote:
JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter.

:checkmark: This sounds way too Muilenberg-esque for me. The contents of the last batch of internal communications released is not consistent with this. Don't forget the RCAS system they revealed that was introduced on the MAX, and in order to justify "grandfathering" it Being had airline customers do retrospective token installs of RCAS on some NGs. All of this kind of stuff was done to make the airplane financially attractive to their airline customers.

Yes, he is coming across as being two faced.

He says his main mission is to rebuild the internal safety and engineering culture, trust and transparency, yet makes no admission that fiscal concerns undermined all of the above on the MAX project.

The first step to recovery is to admit you have a problem.

Engineers are very analytical, and there's no chance they don't already see through him.

His mission is failing even before it starts.

It is very problematic to admit that financial considerations overrode safety considerations, but there's no other way to explain the message dump.

He is hoping that his ploy to use Forkner as a scapegoat works, but I doubt it will.

All it takes is a second message dump involving someone else and the whole strategy crumbles.
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par13del
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:30 pm

flyingphil wrote:
"Boeing surprised us all this week" with its new mid-summer Max return schedule, @SouthwestAir CEO Gary Kelly says.

So dont bother briefing your largest customer ??
Either arrogance or incompetence, not a good start for the new CEO.

One would think that one of your largest customers had gotten the memo from the FAA that only they would determine RTS.....
Does make you go hmmmm.....however, my take is that the timeline is more for the investors versus the airlines, those who invest money on the stock market usually want something each week even daily, Boeing is in no position to provide such, so better to give the long term now and rejoice if it is shorter.
Imagine if the FAA announces on Monday that they have completed their analysis and only have training issues to resolve, the stock value lost over the past week would be regained in a flash.
 
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par13del
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:33 pm

Revelation wrote:
He says his main mission is to rebuild the internal safety and engineering culture, trust and transparency, yet makes no admission that fiscal concerns undermined all of the above on the MAX project.

Well he does still have a boss to answer to and that boss has not changed since his predecessor departed, so I would say his boss has not given him any indication that the script has changed.

Now if he wants to go off the reservation..........
 
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JetBuddy
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:33 pm

Revelation wrote:
hivue wrote:
JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter.

:checkmark: This sounds way too Muilenberg-esque for me. The contents of the last batch of internal communications released is not consistent with this. Don't forget the RCAS system they revealed that was introduced on the MAX, and in order to justify "grandfathering" it Being had airline customers do retrospective token installs of RCAS on some NGs. All of this kind of stuff was done to make the airplane financially attractive to their airline customers.

Yes, he is coming across as being two faced.

He says his main mission is to rebuild the internal safety and engineering culture, trust and transparency, yet makes no admission that fiscal concerns undermined all of the above on the MAX project.

The first step to recovery is to admit you have a problem.

Engineers are very analytical, and there's no chance they don't already see through him.

His mission is failing even before it starts.

It is very problematic to admit that financial considerations overrode safety considerations, but there's no other way to explain the message dump.

He is hoping that his ploy to use Forkner as a scapegoat works, but I doubt it will.

All it takes is a second message dump involving someone else and the whole strategy crumbles.


I agree. It's very weasel like. And just like you say, everybody sees through the arguement and know it's false.

TaromA380 wrote:
What would you like Calhoun to say? His job is to sell the world purposely this version of the story.

Were you expecting a knight in shining armour defending the good and the truth, instead of a beans counter surrounded by lawyers counselors


I would like Calhoun to tell the truth. To own up the issues that caused this. Not blame it on the pilots (indirectly). Boeing has much more to gain from being transparant and honest than to continue Muilenburg's lies. Especially when it comes to the trust of the public.
 
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:47 pm

JetBuddy wrote:
Boeing's new CEO says the MAX issues were not a result of cost factors, but wrong assumptions about how pilots react to failures.

In my opinion this statement alone proves that Calhoun is the wrong guy at the helm. He has been part of that cost cutting culture for a decade already. He's not "new blood", he's another bean counter. And with regards to the NMA/MOM, he says Boeing is "starting over" and shelving the already developed plans. Instead they will focus on China, whatever that means.

"Speaking from Boeing Commercial Airplanes headquarters at Longacres in Renton on a two-day visit to the area ahead of Friday’s expected first flight of the 777X, Calhoun acknowledged the design of the MAX’s new flight control system was flawed, but insisted that was not a product of any deliberate decision to put cost factors ahead of safety.

Instead, he said, the flaws came from long-standing assumptions about how pilots would react to a failure —assumptions that proved fatally wrong."


From the Seattle Times interview, already posted in the News thread. But we have to be able to link news and talk about it in this thread, since the other is strictly a news feed.

https://www.seattletimes.com/business/b ... estore-it/

Yup, he's more of the same. The top two echelons of management should be canned and replaced by retired engineers. Not gonna happen, but it should.
 
TaromA380
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:48 pm

Revelation wrote:
If that's the case he knew how the work was done, he must have had balls of steel to double down after the JT crash. The sensible move then would have been to ground "out of an abundance of caution" and get the fix through the system before all the rest was discovered. It didn't take a rocket scientist to know if one AoA could crash a plane it was only a matter of time till a second AoA had a fault.

With the insight, everything is so simple. He would have better did this or that.
Back then, it was a question of a dozen billions. Throw them or win them.

The JT crash was so unconventional, regarding both the airframe and the crew. That crew (sick Captain & inept FO) was not supposed to be, that day, ever, in command of a pax airliner. Never. This was highly misleading for all the actors.

Boeing as well other entities had to think: what are the chances of crossing again an accidental MCAS activation with a phantom crew? Then, that published AD was meant to further reduce the risk (without revealing too much thus inefficient but that's another story).

What a shock the second crash have been. Competent pilots caught into disorienting situation that led the increasing speed to be considered secondary threat.

And what an unbelievable, unforgettable, epic shame day for the FAA, that moment when all the Planet's meaningful regulators had grounded the Max, all but the FAA.
 
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seahawk
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 6:51 pm

Or say nothing at all at the moment. There is no need to talk about an unlaunched project or explain how it will morph into something revolutionary in the future.
 
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enzo011
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 7:39 pm

TaromA380 wrote:
With the insight, everything is so simple. He would have better did this or that.
Back then, it was a question of a dozen billions. Throw them or win them.

The JT crash was so unconventional, regarding both the airframe and the crew. That crew (sick Captain & inept FO) was not supposed to be, that day, ever, in command of a pax airliner. Never. This was highly misleading for all the actors.

Boeing as well other entities had to think: what are the chances of crossing again an accidental MCAS activation with a phantom crew? Then, that published AD was meant to further reduce the risk (without revealing too much thus inefficient but that's another story).

What a shock the second crash have been. Competent pilots caught into disorienting situation that led the increasing speed to be considered secondary threat.

And what an unbelievable, unforgettable, epic shame day for the FAA, that moment when all the Planet's meaningful regulators had grounded the Max, all but the FAA.


I wish we would move away from crap like this. The crew of the previous flight would have crashed during their flight had their not been a third pilot. What excuse would you have used against them then? Maybe one of them had their thoughts on some nooky with the wife later and this caused him to miss the system that Boeing added but told no one about, or maybe he had a dodgy sandwich and was suppressing a fart, all to take away blame from the aircraft which is safely flying around even today to prove how incompetent those pilots were.
 
TaromA380
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 7:41 pm

Revelation wrote:
He is hoping that his ploy to use Forkner as a scapegoat works, but I doubt it will.

Program managers from everywhere are highly responsible and accountable for their project, no matter what other departments or hierarchy levels will do.

No need of scapegoat theory, it is no secret that if their mission doesn't end well, these managers will endorse all the guilt.
Sure, they had pressure and what not. Still, that’s why not any folk can become program manager in a big company. You must focus on the core despite the noise. Once they sign the paper, nobody can save them if they signed wrong.

M.Forkner not only signed wrong but bragged like no tomorrow about that.

Before the crashes, he was the providential Boeing’s Chuck Norris. I guess they were preparing a statue in the headquarters yard for him, for his achievement of bringing the Max from the drawing board to certification and delivery so cheap, despite the old frame not much suitable for the task.
They were several accomplices program (sub-)managers, not only him, and they should all be guilty. However, his bragging made him scapegoat for his own colleagues: -We trusted Chuck Norris, what could have gone wrong?
 
smartplane
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 8:02 pm

morrisond wrote:
The most interesting quote from the press release is this:

"During fourth quarter, reached confidential agreement with The Boeing Company (Boeing) on compensation related to estimated 2019 financial damages due to the March 13, 2019, Federal Aviation Administration (FAA) order to ground the Boeing 737 MAX aircraft (MAX); substantially all of the compensation will be accounted for as a reduction in the cost basis of both owned MAX aircraft and future purchased MAX aircraft, which is expected to reduce depreciation expense in future years"

Which sounds like to me they just gave them a partial refund on the 34 already delivered and SW will just pay less for each frame going forward. That is a very small current cash cost for Boeing and what many of us on here were guessing would happen.

The aircraft and aircraft engine industry uses conditional retrospective credits, not discounts.

When compensation is negotiated, future retrospective credits are adjusted on tranches which may still be conditional, and even options.

The technique is to encourage order enlargement / discourage order reduction, and build loyalty.

Every action has an effect. If an order is transferred for example to another model (same volume / lower dollar value), then the retrospective credit may be reduced or unchanged.

A customer exclusively A or B, may be earning retrospective credits on aircraft delivered a decade ago, for orders placed today for a model which didn't even exist a decade ago.

Retrospective credits can be converted, like your air miles, to anything from cash through to parts, training and new aircraft, though not on a dollar for dollar basis.

Disclosed discounts, are separate to retrospective credits.

Boeing preference will be to increase retrospective credits, not negotiate cash settlements, though some customers may decide to convert credits to cash at the negotiated credit to cash conversion rate.
 
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 8:23 pm

TaromA380 wrote:
Before the crashes, he was the providential Boeing’s Chuck Norris. I guess they were preparing a statue in the headquarters yard for him, for his achievement of bringing the Max from the drawing board to certification and delivery so cheap, despite the old frame not much suitable for the task.
They were several accomplices program (sub-)managers, not only him, and they should all be guilty. However, his bragging made him scapegoat for his own colleagues: -We trusted Chuck Norris, what could have gone wrong?

Actually he was not a program manager, his mission was to get the sim and the training regime approved and he needed pilot qualifications to do this kind of work. And his position had nothing to do with the true root cause, which was that MCAS had the wrong safety category assigned in a pretty dubious way, thus avoiding the kinds of analysis and testing that could have found the multiple activation problem. Forkner appears in Act II of the play, not Act I, yet the current plot line never resolves Act I.
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TaromA380
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 8:30 pm

Sure, I know he was a sub-manager under the chief program manager, but that bragging exposed him like no other.
The "true root cause" will be interpreted differently by every manager involved, especially for rejecting own guilt. That bragging, however, will "testimony" forever.
 
Interested
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 8:48 pm

TaromA380 wrote:
Sure, I know he was a sub-manager under the chief program manager, but that bragging exposed him like no other.
The "true root cause" will be interpreted differently by every manager involved, especially for rejecting own guilt. That bragging, however, will "testimony" forever.



Boeing fighting tooth and nail against the Max being grounded after the second crash wil also "testimony" for ever

Despite all they knew. Their business and cash came ahead of safety

Shameful
 
astuteman
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 8:56 pm

par13del wrote:
astuteman wrote:
I saw Boeing forwarding all of the "clowns and monkeys" documents voluntarily to the FAA, and Calhoun backing off from optimistic forecasts of return to service that seemed at odds with the FAA as signs that the corner was being turned.
Rgds

I am thinking he is regretting that as of now, the way to regain the trust of the FAA is by hard work, not by throwing your organization under the bus, especially when in the job market that exist in the USA, they cannot clean house of all the superior humans.
I would not be shocked if the 787 initial design and production model is started again all in the name of regaining trust in the Boeing brand.

Time will tell.


I don't disagree with the hard work bit. But I think a demonstration that "nothing is hidden" is/was a vital part of beginning to rebuild the trust.
It didn't make great reading, but clearing out the crap usually results in things looking worse before they start to look better.
I know some posters on here think Boeing are getting dumped on, when for most of us the opposite outcome is our true aim.
I want to see them take responsibility for their own destiny by "shining the light on themselves" as Calhoun says, and working out the ways to become great again.
Reality is we need that as fans of the industry, and as fans of flying.
It's why I see being open with the FAA as a good thing.
It's why I see throwing Forkner under a bus as a bad thing.

It may be because its late at night, but I didn't understand your reference to the 787.
Apologies for being dense - I would welcome an explanation

Rgds
 
art
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 9:08 pm

Interested wrote:
The new CEO won't last 12 months

Why bother replacing the old one?

Same old BS

At some stage someone external with knowledge of the real world and how to gain trust etc will be appointed to pick up pieces of an even bigger mess

Mark my words

Boeing haven't learnt a single thing from what's happened so far


IMO they needed a management culture change and missed the opportunity.

Trouble is the executives running Boeing are more interested in making excellent money for themselves than making excellent airplanes to profit the company they work for. Reminds me of Catch 22 in which Milo (the character played in the film by John Voigt) was more interested in making money out of the war than in the war itself.
 
Interested
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 9:17 pm

art wrote:
Interested wrote:
The new CEO won't last 12 months

Why bother replacing the old one?

Same old BS

At some stage someone external with knowledge of the real world and how to gain trust etc will be appointed to pick up pieces of an even bigger mess

Mark my words

Boeing haven't learnt a single thing from what's happened so far


IMO they needed a management culture change and missed the opportunity.

Trouble is the executives running Boeing are more interested in making excellent money for themselves than making excellent airplanes to profit the company they work for. Reminds me of Catch 22 in which Milo (the character played in the film by John Voigt) was more interested in making money out of the war than in the war itself.


That's certainly how it seems right now

Maybe the only way out is some kind of US government take over once all trust is totally gone and the mess gets worse

I wouldn't trust the current leadership and board an inch. Way too much self interest and self preservation going on
 
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Revelation
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 10:05 pm

TaromA380 wrote:
Sure, I know he was a sub-manager under the chief program manager, but that bragging exposed him like no other.
The "true root cause" will be interpreted differently by every manager involved, especially for rejecting own guilt. That bragging, however, will "testimony" forever.

Yes, that is what makes him a great scapegoat, his bragging draws the attention that could be used to look in other places.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
TObound
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Thu Jan 23, 2020 11:08 pm

He talks about making engineering assumptions that were fault. But they specifically went out of their way to argue that the FAA shouldn't mandate they have EICAS on the 737. The only Boeing aircraft sold today without it.
https://www.seattletimes.com/business/b ... ew-alerts/

The results are here:
https://accidentstats.airbus.com/

If you dislike the source, prove them wrong with data. Can't argue that proper fourth-gen FBW aircraft are where it's at. And Boeing made some terrible choices in not bringing the MAX into the 21st century.
 
phollingsworth
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Re: Boeing 737MAX Grounding News and Reference Thread 2020

Fri Jan 24, 2020 9:18 am

JayinKitsap wrote:
A different article based on the Calhoun interview. Seattle Times

Calhoun announced that the development work Boeing has been doing for several years on a new airplane—internally known as the New Midmarket Airplane (NMA)—is starting over.

“We’re not giving up on the future,” he said. “But for me, my attention and that of my executive team, I simply want to be focused” on fixing the MAX and re-emphasizing engineering and safety.

Calhoun announced that the development work Boeing has been doing for several years on the NMA is starting over.



https://www.seattletimes.com/business/b ... estore-it/


This means that the 737-MAX and 777X programmes are consuming all of Boeing's design and development resources, including the Preliminary Design folks. This has happened before with the 787, 747-8. The result of that was the 737-MAX as Boeing did not have the human resources to create a clean-sheet design in the time the market demanded, e.g. answer the A320NEO
 
Jetty
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 3:12 pm

astuteman wrote:
I saw Boeing forwarding all of the "clowns and monkeys" documents voluntarily to the FAA

You really think Boeing would release such messages voluntarily knowing their company culture? :? They were requested by Congress and being in contempt of Congress is a criminal offense.
 
dtw2hyd
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 3:15 pm

What percentage of LEAP-1A and LEAP-1B components are common?
All posts are just opinions.
 
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767333ER
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 4:16 pm

JetBuddy wrote:
Revelation wrote:
hivue wrote:
:checkmark: This sounds way too Muilenberg-esque for me. The contents of the last batch of internal communications released is not consistent with this. Don't forget the RCAS system they revealed that was introduced on the MAX, and in order to justify "grandfathering" it Being had airline customers do retrospective token installs of RCAS on some NGs. All of this kind of stuff was done to make the airplane financially attractive to their airline customers.

Yes, he is coming across as being two faced.

He says his main mission is to rebuild the internal safety and engineering culture, trust and transparency, yet makes no admission that fiscal concerns undermined all of the above on the MAX project.

The first step to recovery is to admit you have a problem.

Engineers are very analytical, and there's no chance they don't already see through him.

His mission is failing even before it starts.

It is very problematic to admit that financial considerations overrode safety considerations, but there's no other way to explain the message dump.

He is hoping that his ploy to use Forkner as a scapegoat works, but I doubt it will.

All it takes is a second message dump involving someone else and the whole strategy crumbles.


I agree. It's very weasel like. And just like you say, everybody sees through the arguement and know it's false.

TaromA380 wrote:
What would you like Calhoun to say? His job is to sell the world purposely this version of the story.

Were you expecting a knight in shining armour defending the good and the truth, instead of a beans counter surrounded by lawyers counselors


I would like Calhoun to tell the truth. To own up the issues that caused this. Not blame it on the pilots (indirectly). Boeing has much more to gain from being transparant and honest than to continue Muilenburg's lies. Especially when it comes to the trust of the public.

It reminds me of the last verse The Who’s “Won’t Get Fooled Again”... or another one I’d hear folks say from time to time, same s***, different smell. Unfortunately, this is exactly what is expected of him. Protect the company image as best as possible while giving the appearance of being transparent so that when this all eventually blows over they can go back to business as usual where the big guys at the top are making record profits by keeping costs low. Sadly, to me, It looks like this is confirmation that they still trust in and want to maintain their cost cutting culture meaning little to no lessons were learned other than likely how to do it a little more diligently and what president has been set now as far what they can get away with without paying much of a price.
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Scotron12
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 4:35 pm

Interested wrote:
art wrote:
Interested wrote:
The new CEO won't last 12 months

Why bother replacing the old one?

Same old BS

At some stage someone external with knowledge of the real world and how to gain trust etc will be appointed to pick up pieces of an even bigger mess

Mark my words

Boeing haven't learnt a single thing from what's happened so far


IMO they needed a management culture change and missed the opportunity.

Trouble is the executives running Boeing are more interested in making excellent money for themselves than making excellent airplanes to profit the company they work for. Reminds me of Catch 22 in which Milo (the character played in the film by John Voigt) was more interested in making money out of the war than in the war itself.


That's certainly how it seems right now

Maybe the only way out is some kind of US government take over once all trust is totally gone and the mess gets worse

I wouldn't trust the current leadership and board an inch. Way too much self interest and self preservation going on


This estimated $20-25Billion cost (could be more) that the MAX issues have caused them, they just add that to their program block? If so, in effect all this fiasco is costing them nothing!

Unless or course the MAX does not fly.ever.again.
 
kalvado
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 5:05 pm

Scotron12 wrote:
Interested wrote:
art wrote:

IMO they needed a management culture change and missed the opportunity.

Trouble is the executives running Boeing are more interested in making excellent money for themselves than making excellent airplanes to profit the company they work for. Reminds me of Catch 22 in which Milo (the character played in the film by John Voigt) was more interested in making money out of the war than in the war itself.


That's certainly how it seems right now

Maybe the only way out is some kind of US government take over once all trust is totally gone and the mess gets worse

I wouldn't trust the current leadership and board an inch. Way too much self interest and self preservation going on


This estimated $20-25Billion cost (could be more) that the MAX issues have caused them, they just add that to their program block? If so, in effect all this fiasco is costing them nothing!

Unless or course the MAX does not fly.ever.again.

Most likely costs will be redistributed over lifetime of max, may be some written down at the end of the program. It is still hurting cash flow and future profit. And every one knows that it really hurts right now.
 
Cruiser
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 6:21 pm

Very interesting article on the financing side:
https://ca.reuters.com/article/business ... AKBN1ZN1P5


At a gathering in Dublin this week of the titans of the multibillion-dollar aircraft leasing industry, which finances half the world’s fleet, cracks were appearing in that effort.

...

Airplane owners and investors said some lenders were already demanding higher collateral in deals on the MAX. One airline said financing for pre-delivery payments had dried up amid the uncertainty - though the market won’t be fully tested until closer to renewed deliveries.

“Even people who have committed to financing previously are wondering should I extend or should I just pull back to wait to see because they don’t know the real value of their collateral going forward,” said the head of an asset-management firm active in the sector, declining to be named to preserve relations with Boeing.

“Banks I think are getting a bit nervous,” he said.

Leahy on Per Seat Costs: "Have you seen the B-2 fly-by at almost US$1bn a copy? It has only 2 seats!"
 
smartplane
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 7:13 pm

Cruiser wrote:
Very interesting article on the financing side:
https://ca.reuters.com/article/business ... AKBN1ZN1P5


At a gathering in Dublin this week of the titans of the multibillion-dollar aircraft leasing industry, which finances half the world’s fleet, cracks were appearing in that effort.

...

Airplane owners and investors said some lenders were already demanding higher collateral in deals on the MAX. One airline said financing for pre-delivery payments had dried up amid the uncertainty - though the market won’t be fully tested until closer to renewed deliveries.

“Even people who have committed to financing previously are wondering should I extend or should I just pull back to wait to see because they don’t know the real value of their collateral going forward,” said the head of an asset-management firm active in the sector, declining to be named to preserve relations with Boeing.

“Banks I think are getting a bit nervous,” he said.


Do you blame them? Boeing has been communicative with customers, but nowhere to the same extent with financiers and insurers.

Some pre-shipment finance specialists, who specialise in low margin, short term, quick turnover funding, are wanting Boeing Capital to take them out.

Insurers and financiers are going to be a much bigger factor in future sales. Additional Boeing customer credits in compensation may be partly / fully consumed by additional finance and insurance margins.

If there is any cloud hanging over MAX post RTS, and / or until outstanding AD's are actioned post-RTS, then operators can expect higher margins compared to other models.

Ditto X. Needs to be squeeky clean, with airworthiness authorities confirming it's been subjected to MAX style reviews, and not found wanting.

The industry is a bit shell shocked, wondering what disclosures for other makes and models could yet emerge.
 
morrisond
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 9:41 pm

According to the FAA - MAX could fly before Mid-Year.

https://www.cnbc.com/2020/01/24/boeing- ... -says.html
 
MrBretz
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 11:20 pm

morrisond wrote:
According to the FAA - MAX could fly before Mid-Year.

https://www.cnbc.com/2020/01/24/boeing- ... -says.html


I saw this and was about to post it. I have trouble believing the FAA said that but there it is. I bet I fly on the 737-8 in the future. I am not going to tell my wife that they will rename the MAX, assuming they will.
 
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Revelation
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 11:35 pm

MrBretz wrote:
morrisond wrote:
According to the FAA - MAX could fly before Mid-Year.

https://www.cnbc.com/2020/01/24/boeing- ... -says.html


I saw this and was about to post it. I have trouble believing the FAA said that but there it is. I bet I fly on the 737-8 in the future. I am not going to tell my wife that they will rename the MAX, assuming they will.

The new CEO says renaming the MAX will not matter, the real thing that will matter is commercial pilots willingness to fly the plane. Once this is demonstrated he feels the public will be reassured.
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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MrBretz
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Fri Jan 24, 2020 11:45 pm

You are absolutely right, Revelation.

I am awaiting the certification flights see what the FAA will tell us.
 
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par13del
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 1:50 am

astuteman wrote:
It may be because its late at night, but I didn't understand your reference to the 787.
Apologies for being dense - I would welcome an explanation

Rgds

The 787 initial design and production was to outsource everything and Boeing just become an assembler of a/c versus the existing design and engineering company they were at the time, the 787 was supposed to be leggo with Boeing putting the pieces together.

Unfortunately, history has shown that when large companies like Boeing need to make a step change it starts in the executive suite and they can be as impatient as everyone else, they want to do something quickly, usually that means outside parties, how much and how far will be the question.
However, I would not be shocked if the company's response to MAX is to go way over onto the other side and trust very little internal resources with initial design and risk analysis of their next a/c under the mantra of regaining trust by bringing the world in....
 
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par13del
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 1:55 am

MrBretz wrote:
morrisond wrote:
According to the FAA - MAX could fly before Mid-Year.

https://www.cnbc.com/2020/01/24/boeing- ... -says.html


I saw this and was about to post it. I have trouble believing the FAA said that but there it is. I bet I fly on the 737-8 in the future. I am not going to tell my wife that they will rename the MAX, assuming they will.

Note the effect on the stock market and note who he spoke to, the airlines, so was he playing politics by wearing his other hat to show he has the interest of the industry at heart or just blowing smoke? Note he still say no timeline but he thinks Boeing's timeline is conservative, methink he does talk too much.
State he regrets the job losses and the hurt in the industry but the safety of the travelling public is priority right now.
 
astuteman
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 2:15 am

par13del wrote:
astuteman wrote:
It may be because its late at night, but I didn't understand your reference to the 787.
Apologies for being dense - I would welcome an explanation

Rgds

The 787 initial design and production was to outsource everything and Boeing just become an assembler of a/c versus the existing design and engineering company they were at the time, the 787 was supposed to be leggo with Boeing putting the pieces together.

Unfortunately, history has shown that when large companies like Boeing need to make a step change it starts in the executive suite and they can be as impatient as everyone else, they want to do something quickly, usually that means outside parties, how much and how far will be the question.
However, I would not be shocked if the company's response to MAX is to go way over onto the other side and trust very little internal resources with initial design and risk analysis of their next a/c under the mantra of regaining trust by bringing the world in....


Ah, I get it now. Thanks.

I can't help feeling that that is the wrong way to try to fix this.
That type of sudden change tends to break things you don't know about whilst you're trying to fix the things you do know about.
I think it would be a shame if that type of knee jerk response were exhibited.

Rgds
 
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par13del
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 2:46 am

The saying is patience is a virtue but....
See the disappointment in A.Net when the new CEO makes some questionable statements, or Wall Street reaction to FAA head, we are a society who expects instant gratification, at times the exec suite is no different.

One thing we can look forward to is an interesting next couple years at Boeing.
 
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767333ER
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 5:21 am

MrBretz wrote:
morrisond wrote:
According to the FAA - MAX could fly before Mid-Year.

https://www.cnbc.com/2020/01/24/boeing- ... -says.html


I saw this and was about to post it. I have trouble believing the FAA said that but there it is. I bet I fly on the 737-8 in the future. I am not going to tell my wife that they will rename the MAX, assuming they will.

Well it doesn’t say much. Very vague, very imprecise, and all for a very good reason. They use words like could and around and before mid-year so that we can’t exactly pinpoint what the are referring to and discredit them. I actually use this trick myself a lot; it does work. They also said they could have it flying by the end of 2019 and I’m pretty sure the FAA said at one point by February or March. It’s possible I guess, but wouldn’t Boeing have said so themselves if it were to be sooner?
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AndyW35
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 8:48 am

A screencap from watching the 777x yesterday ..

http://www.zen141854.zen.co.uk/rainbow.jpg

I hope that is a good potent for the company in 2020.
 
uta999
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Re: Boeing 737MAX Grounding, General Discussion Thread, January 2020

Sat Jan 25, 2020 9:21 am

How hard can it be for Boeing to build and certify a fully-protected FBW 737-8/9/10? They have virtually everything they need in stock (787). It could even be called a 737-FBW with deliveries starting around 2023/24 and could be built in tandem with the MAX.

Get the MAX flying again sometime this year, but in parallel take a few Spirit 737 hulls and shoe-horn the 787 FBW systems into it. Airlines can then choose to either wait for the new FBW model or take the #safe+safer MAX earlier. Then Boeing can concentrate on a clean-sheet 757/767 WB replacement rather than try and do both at the same time.
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