Boeing to make $50M in payments to 737 MAX crash victims' families

WASHINGTON -- Boeing Co said on Wednesday it would dedicate half of a $100 million fund it created after two crashes of its 737 MAX planes to provide payments to families of those killed, with veteran US compensation expert Ken Feinberg hired by the world's largest plane maker to oversee the distribution.

The announcement of Feinberg's hiring came minutes before a US House of Representatives hearing featuring dramatic testimony by Paul Njoroge, a father who lost 3 children, his wife and mother-in-law in a 737 MAX Ethiopian Air crash in March.

Feinberg told Reuters his team would "start immediately drafting a claims protocol for those eligible," with the first meeting with officials from Chicago-based Boeing later this week in Washington. Feinberg has administered many compensation funds including for victims of the Sept. 11, 2001, attacks on the United States, the 2010 Deepwater Horizon oil spill, General Motors ignition switch crashes and numerous school shootings.

The 737 MAX, Boeing's best-selling jet, was grounded globally in March following the Ethiopian Airlines crash after a similar Lion Air disaster in Indonesia in October. The 2 crashes killed 346 people.

Njoroge, 35, told reporters after he testified he did not think the public would trust Boeing going forward. "Do you want to fly in those planes? Do you want your children to fly in those planes?" Njoroge asked. "I don't have any more children."

Njoroge told a House subcommittee he still has "nightmares about how (his children) must have clung to their mother crying" during the doomed flight.

Njoroge, who was born in Kenya and lives in Canada, said Boeing has blamed "innocent pilots who had no knowledge and were given no information of the new and flawed MCAS system that could overpower pilots."

Boeing did not address specific questions raised by Njoroge but said in a statement "we truly regret the loss of lives in both of these accidents and we are deeply sorry for the impact to the families and loved ones of those on board."

A Boeing official told Reuters last month that after a new software flaw emerged the company would not submit an MCAS software upgrade and training revision until September, which means the planes will not resume flying until November at the earliest. US airlines have canceled flights through early November as a result of the 737 MAX's grounding.

Boeing shares closed up 1.9 percent Wednesday.

Acting FAA Administrator Dan Elwell told Fox Business Network on Wednesday that the agency has made a lot of progress since the plane's grounding.

"We have discovered some anomalies and then we have directed Boeing to mitigate those anomalies," Elwell said, declining to set any timetable for returning the plane to service.

"The 737 MAX is not going to fly until it passes the most thorough and intense look," said Elwell, adding that he had spent several hours with Njoroge during a recent meeting.

Boeing said on July 3 it would give $100 million over multiple years to local governments and non-profit organizations to help families and communities affected by the crashes in Indonesia and Ethiopia.

Feinberg, who will jointly administer the fund with lawyer Camille Biros, said the other $50 million in the fund was earmarked for government and community projects.

Boeing reiterated on Wednesday that the money distributed through the fund would be independent from the outcome of any lawsuits. The company is facing a slew of litigation from the families of victims of both crashes.

"Through our partnership with Feinberg and Biros, we hope affected families receive needed assistance as quickly and efficiently as possible," Boeing Chief Executive Dennis Muilenburg said in a statement.

Boeing's initial announcement of the $100 million fund was met with anger by some victims' families, who described the offer as a publicity stunt.

At the hearing in Washington, Representative Peter DeFazio, chairman of the House Transportation Committee, said he would call Boeing officials to testify at a hearing. DeFazio said the committee was in the middle of an in-depth investigation and had just received a "trove" of documents that panel investigators were reviewing.

source: news.abs-cbn.com

737 MAX disaster pushes Boeing into crisis mode

NEW YORK -- After a second air disaster involving the 737 MAX 8, aviation giant Boeing swung into crisis mode, losing $25 billion of market capitalization and suffering a severe hit to its reputation.

That was made worse by the company's response, according to industry experts, who described their efforts variously as "terrible," and "rough."

The tragedy of the Ethiopian Airlines flight on Sunday, in which all 157 people on board perished, renewed fears about the safety of the plane, and led to it being grounded worldwide -- although the US decision was not made for three days.

"It's been a rough week for them," said Matt Yemma, a crisis communication specialist at Peaks Strategies, based in Connecticut.

Boeing -- which in the first days after the accident said the MAX was reliable and safe -- could have announced it was voluntarily grounding the planes on Sunday to restore confidence and ensure the flying public they were on top of the problem, he said.

"Instead they just kind of let things dragged on and they end up losing a lot of market cap and a lot of business."

It was not until Wednesday after many governments and airlines worldwide had already banned the plane, that Boeing followed suit "out of an abundance of caution."

This was the second tragic accident in less than five months involving this model, which has been in service since May 2017, after the crash of a Lion Air flight in October which killed 189 people. 

A malfunction of the new MCAS stall prevention system on the MAX was implicated in the Lion Air accident in Indonesia. 

And the Federal Aviation Administration said evidence at the crash site in Ethiopia and new satellite data showed similarities and warranted "further investigation of the possibility of a shared cause for the two incidents."

And despite the growing use of the MAX worldwide, in China and Europe in particular, Boeing only issued brief statements, and meanwhile appeared to be attempting to prevent the US authorities from grounding the plane. 

Two days after the accident, the company's CEO Dennis Muilenburg spoke on the phone with President Donald Trump, who had complained on Twitter that modern airplanes were becoming too complex for pilots to handle. 

'American arrogance'

And it didn't help that the FAA announced it had ordered Boeing to make a software fix to the MCAS flaw, which some American pilots also encountered, raising questions about whether the manufacturer was diligent about getting the word out.

"It's the American arrogance," a source close to the aircraft manufacturer told AFP, which is "dangerous because it shows that the work was not done properly" due to overconfidence.

Others said the company should have moved more quickly to get out in front of the problem.

"Typically in a situation like this, you want to give as much information as you possibly can," especially given how quickly news whips around the globe, Yemma said.

"You want to make your clients, passengers and the public feel at ease about wanting to fly your planes. And the market and investors need to know there is nothing wrong and if there is something wrong that it's going to be fixed."

Michael Priem of communications firm Modern Impact in Minneapolis, agreed Boeing should have moved faster to reassure the general public. 

The public expects "very quick responses and I think Boeing didn't engage in the conversation soon enough," he told AFP.

Two industry sources told AFP on Friday that the company will be rolling out a software upgrade for the MCAS in the next 10 days, which helped boost its share price, but the lag since the October crash in Indonesia is troubling.

And Captain Chesley "Sully" Sullenberger -- noted for his safe landing of a damaged plane on the Hudson River in New York without loss of life -- questioned Boeing's response as well.

"It has been obvious since the Lion Air crash that a redesign of the 737 MAX 8 has been urgently needed ... and the announced proposed fixes do not go far enough," he said on social media.

The issue has drawn the scrutiny of Congress, with key oversight committees planning hearings to look into the aircraft and flaws.

"I continue to have serious concerns about key decisions made in the FAA's certification of the 737 MAX, and what was, and was not, disclosed to pilots," said Representative Peter DeFazio, head of the Transportation and Infrastructure Committee.

"I will be conducting a rigorous investigation to make sure that FAA is carrying out its critical safety mission."

Boeing may have to roll out a public relations campaign to try to restore confidence in its aircraft. 

The company will have to provide a sincere "mea culpa" because "the damage is done," a source close to the aircraft manufacturer told AFP.

source: news.abs-cbn.com

EU suspends Boeing 737 MAX flights, US senators suggest similar move

ADDIS ABABA/PARIS - The European Union's aviation safety regulator on Tuesday suspended all flights in the bloc by Boeing 737 MAX and the US Senator who chairs a panel overseeing aviation suggested the United States take similar action following a crash in Ethiopia that killed 157 people.

Britain, Germany, and France joined a wave of suspensions of the aircraft in the wake of Sunday's crash, and was swiftly followed by a similar decision by India, piling pressure on the United States to follow suit.

Boeing, the world's biggest planemaker, which has seen billions of dollars wiped off its market value after the crash, said it understood the countries' actions but retained "full confidence" in the 737 MAX and had safety as its priority.

It also said the US Federal Aviation Authority (FAA) had not demanded any further action related to 737 MAX operations.

The cause of the crash, which followed another disaster with a 737 MAX 5 months ago in Indonesia that killed 189 people, remains unknown.

There is no evidence yet whether the 2 crashes are linked. Plane experts say it is too early to speculate on the reason for the crash. Most are caused by a unique chain of human and technical factors.

In an unusual move, the European Union Aviation Safety Agency (EASA) said it was suspending all flights in the bloc of Boeing's 737 MAX 8 and 9 jets.

"Based on all available information, EASA considers that further actions may be necessary to ensure the continued airworthiness of the 2 affected models," it said in a statement.

However, it shied away from the even rarer step of pulling the safety certification for the plane itself, focusing instead on the softer process of restricting its use by airlines. The move leaves some leeway for the US FAA to decide its own approach.

Flight ET 302 came down in a field soon after takeoff from Addis Ababa, creating a fireball in a crater. It may take weeks or months to identify all the victims, who include a prize-winning author, a soccer official, and a team of humanitarian workers.

Boeing shares fell 6.1 percent on Tuesday bringing losses to 11.15 percent since the crash, the steepest 2-day loss for the stock since July 2009. The drop has lopped $26.65 billion off Boeing's market value.

SENATE HEARING

The United States has said it remains safe to fly the planes but US Senator Ted Cruz, a Republican who chairs the Senate subcommittee on aviation and space, said on Tuesday it would be "prudent" for the United States "to temporarily ground 737 Max aircraft until the FAA confirms the safety of these aircraft and their passengers."

Cruz said he intends to convene a hearing to investigate the crashes.

Two other senators, Republican Mitt Romney and Democrat Elizabeth Warren, called on the FAA to temporarily ground the 737 MAX.

President Donald Trump also fretted over modern airplane design.

"Pilots are no longer needed, but rather computer scientists from MIT," Trump tweeted, lamenting that product developers always sought to go an unnecessary step further when "old and simpler" was superior.

"I don't know about you, but I don't want Albert Einstein to be my pilot. I want great flying professionals that are allowed to easily and quickly take control of a plane!" he added.

He did not refer to Boeing or recent accidents, but his comments echoed an automation debate that partially lies at the center of a probe into October's Lion Air crash in Indonesia.

Investigators are examining the role of a software system designed to push the plane down, alongside airline training and repair standards.

Boeing says it plans to update the software in coming weeks.

Trump, concerned about the Ethiopia crash, spoke to Boeing CEO Dennis Muilenburg on Tuesday and received assurances that the aircraft was safe, 2 people briefed on the call said.

China, Indonesia, Singapore, Australia, Malaysia, and others have also temporarily suspended the 737 MAX.

The decision by some countries to ban not only arrivals and departures but flights crossing through their airspace surprised some regulatory sources even in regions banning the plane, since overflights are usually protected by international law.

VICTIMS FROM 30 NATIONS

Given problems of identification at the charred disaster site, Ethiopian Airlines said it would take at least 5 days to start handing remains to families.

The victims came from more than 30 different nations, and included nearly 2 dozen UN staff.

"We are Muslim and have to bury our deceased immediately," Noordin Mohamed, a 27-year-old Kenyan businessman whose brother and mother died, told Reuters.

"Losing a brother and mother in the same day and not having their bodies to bury is very painful," he said in the Kenyan capital Nairobi where the plane had been due.

Anxiety was also evident among some travelers, who rushed to find out from social media and travel agents whether they were booked to fly on 737 MAX planes.

If the black box recordings found at the Ethiopian crash site are undamaged, the cause of the crash could be identified quickly, although it typically takes a year for a full probe.

The new variant of the 737, the world's most-sold modern passenger aircraft, is viewed as the likely workhorse for global airlines for decades and 4,661 more are on order.

Over 40 percent of the MAX fleet has been grounded, Flightglobal said, though many airlines still use older jets.

Still, major customers including top airlines from North America kept flying the 737 MAX. Southwest Airlines Co, which operates the largest fleet of 737 MAX 8s, said it remained confident in the safety of all its Boeing planes.

Former FAA accident investigator Mike Daniel said the decision by regulators to ground the planes was premature. 

"To me it's almost surreal how quickly some of the regulators are just grounding the aircraft without any factual information yet as a result of the investigation," he told Reuters.

source: news.abs-cbn.com

Indonesia temporarily grounds Boeing 737 MAX 8 after Ethiopia crash

Air Transportation Director General Polana Pramesti said in a press statement that the action was taken to guarantee air safety in Indonesia.

"One of the measures will be carrying out an inspection (of all Boeing 737 MAX 8)...to ensure that the planes of that type are airworthy," Pramesti said.

If any problems are found, the jets will be grounded until the problems are settled, she added.

An Ethiopian Airlines Boeing 737 MAX 8 plane crashed shortly after takeoff on Sunday, killing all 157 people on board, according to the state-run Ethiopian Broadcasting Corp.

Indonesian citizen Harina Hafitz, an employee of the Rome-based World Food Program, was among those killed in the crash, the second fatal incident involving the aircraft type in just five months.

On Oct. 29, a Boeing 737 MAX 8 belonging to Indonesian budget carrier Lion Air crashed into the Java Sea 13 minutes after taking off from Jakarta, killing all 189 people on board. The plane had been put into service only in August.

Pramesti also stressed that she is continuing to cooperate with the country's National Transportation Safety Committee, Boeing Co. and global aviation institutions to keep evaluating any matters related to Lion Air flight JT610.

Indonesia has 11 Boeing 737 MAX 8 planes, with 10 of them being operated by Lion Air and one by national carrier Garuda Indonesia.

A preliminary investigative report of the Lion Air crash released by the safety committee showed that shortly after takeoff, the plane's anti-stall mechanism was activated, apparently by incorrect sensor readings, forcing its nose down.

source: news.abs-cbn.com

Ethiopian Airlines flight to Nairobi crashes, killing 157

NAIROBI -- An Ethiopian Airlines passenger jet bound for Nairobi crashed minutes after take-off on Sunday, killing all 157 people on board and raising questions about the safety of the Boeing 737 MAX 8, a new model that also crashed in Indonesia in October.

Sunday's flight left Bole airport in Addis Ababa at 8:38 a.m., before losing contact with the control tower just a few minutes later at 8:44 a.m.

"There are no survivors," the airline tweeted alongside a picture of CEO Tewolde GebreMariam holding up a piece of debris inside a large crater at the crash site.

Passengers from 33 countries were aboard, said Tewolde in a news conference. The dead included Kenyan, Ethiopian, American, Canadian, French, Chinese, Egyptian, Swedish, British, Dutch, Indian, Slovakian, Austrian, Swedish, Russian, Moroccan, Spanish, Polish, and Israeli citizens.

Weeping relatives begged for information at airports in Nairobi and Addis Ababa.

"We're just waiting for my mum. We're just hoping she took a different flight or was delayed. She's not picking up her phone," said Wendy Otieno, clutching her phone and weeping.

The aircraft, a 737 MAX 8, is the same model that crashed into the Java Sea shortly after take-off from Jakarta on Oct. 29, killing all 189 people on board the Lion Air flight.

The cause of that crash is still under investigation.

Ethiopian's new aircraft had no recorded technical problems and the pilot had an "excellent" flying record, Tewolde said in a news conference.

“We received the airplane on November 15, 2018. It has flown more than 1,200 hours. It had flown from Johannesburg earlier this morning," he said. “The pilot mentioned that he had difficulties and that he wanted to return."

'UNSTABLE SPEED'

Flight ET 302, registration number ET-AVJ, crashed near the town of Bishoftu, 62 km southeast of the capital Addis Ababa, with 149 passengers and eight crew aboard, the airline said.

The flight had unstable vertical speed after take off, the flight tracking website Flightradar24 tweeted.

The aircraft had shattered into many pieces and was severely burnt, a Reuters reporter at the scene of the crash said. Clothing and personal effects were scattered widely over the field where the plane came down.

It was not clear what had caused the crash. Boeing sent condolences to the families and said it was ready to help investigate.

This is the second recent crash of the latest version of Boeing’s workhorse narrowbody jet that first entered service in 2017. The 737 is the world’s best selling modern passenger aircraft and one of the industry’s most reliable.

A preliminary report into the October Lion Air crash, focused on airline maintenance and training and the response of a Boeing anti-stall system to a recently replaced sensor, but did not give a reason for the crash. Since then, the cockpit voice recorder was recovered and a final report is due later this year.

ANGUISHED RELATIVES

At Nairobi airport, many relatives were left waiting at the gate for hours, with no information from airport authorities. Some learned of the crash from journalists.

Robert Mutanda, 46, was waiting for his brother-in-law, a Canadian citizen.

"No, we haven't seen anyone from the airline or the airport," he told Reuters at 1 p.m., more than three hours after the flight was lost. "Nobody has told us anything, we are just standing here hoping for the best."

Kenyan officials did not arrive at the airport until 1:30 p.m., five hours after the plane went down.

James Macharia, the cabinet secretary for transport, said he heard about the crash via Twitter.

Families were taken to Nairobi's Sheraton hotel, but said they were still waiting to hear from airline staff eight hours after the accident.

ETHIOPIAN AIRLINES

Under international rules, responsibility for leading the crash investigation lies with Ethiopia but the U.S. National Transportation Safety Board (NTSB) will also participate because the plane was designed and built in the United States.

Representatives of Boeing and Cincinnati-based engine-maker CFM, a joint venture between General Electric and General Electric Co and France’s Safran SA will advise the NTSB.

Ethiopian is one of the biggest carriers on the continent by fleet size. The plane was among six of 30 Boeing 737 MAX 8 jets the rapidly expanding carrier has ordered.

The fleet will continue flying since the cause of the crash is not clear, the CEO said.

Its last major crash was in January 2010, when a flight from Beirut went down shortly after take-off, killing all 90 people onboard. The Lebanese blamed pilot error, which was disputed by the airline.

source: news.abs-cbn.com