Boeing Co's ousted chief executive officer Dennis Muilenburg is leaving the company with $62 million in compensation and pension benefits but will receive no severance pay in the wake of the 737 MAX crisis.
Muilenburg was fired from the job in December as Boeing failed to contain the fallout from a pair of fatal crashes that halted output of the company's bestselling 737 MAX jetliner and tarnished its reputation with airlines and regulators.
The compensation figures were disclosed in a regulatory filing late on Friday during a difficult week for Boeing when it also released hundreds of internal messages -- 2 major issues hanging over the company before new CEO David Calhoun starts on Monday.
The messages contained harshly critical comments about the development of the 737 MAX, including one that said the plane was "designed by clowns who in turn are supervised by monkeys."
The 737 MAX has been grounded since March following the second of 2 crashes that together killed 346 people within a span of 5 months.
Lawmakers blasted Boeing on Friday.
"346 people died. And yet, Dennis Muilenburg pressured regulators and put profits ahead of the safety of passengers, pilots, and flight attendants. He'll walk away with an additional $62.2 million. This is corruption, plain and simple," US Senator Elizabeth Warren said on Twitter.
US Rep. Peter DeFazio, who chairs the House Transportation Committee, said minutes of a June 2013 meeting showed that Boeing sought to avoid expensive training and simulator requirements by misleading regulators about an anti-stall system called MCAS that was later tied to the 2 crashes that killed 346 people.
The MAX has been grounded since the second crash in March.
Speculation that Muilenburg would be fired had been circulating in the industry for months, intensifying in October when the board stripped him of his chairman's title - although he had also twice won expressions of confidence from Calhoun, Boeing's board chairman.
A turnaround veteran and former General Electric Co executive who has led several companies in crisis, Calhoun will receive a base salary at an annual rate of $1.4 million and is eligible for $26.5 million in long-term incentive compensation, Boeing said in a filing.
Boeing said in November Muilenburg had volunteered to give up his 2019 bonus and stock awards. For 2018, his bonus and equity awards amounted to some $20 million, according to filings.
In addition to the $62 million in compensation and pension benefits, Muilenburg holds stock options that vested in 2013, Boeing said. They would be worth $18.5 million at the closing price on Friday.
"Upon his departure, Dennis received the benefits to which he was contractually entitled and he did not receive any severance pay or a 2019 annual bonus," Boeing said in a statement.
source: news.abs-cbn
NEW YORK -- United Airlines said Tuesday it had ordered 50 Airbus A321XLR aircraft, worth an estimated $6.5 billion, to replace an existing fleet of aging Boeings.
The new Airbus planes, which will be delivered in 2024, will allow United to retire its Boeing 757-200s, the company said.
The Airbus order is the latest blow to the American manufacturer, already deeply mired in the crisis surrounding its 737 MAX.
Boeing, whose 737 MAX has been grounded worldwide after two crashes that resulted in 346 deaths, currently has no new aircraft to compete with the Airbus A321XLR in the mid-market range.
Airbus launched the A321XLR only this year, at the Paris Air Show in June.
The single-aisle aircraft's range is 15 percent above that of its predecessor model, the A321LR, making it a cost-effective alternative to long-haul wide-body planes.
United said it would use the new aircraft to serve additional European destinations from US East Coast hubs in Newark/New York and Washington.
United turned to Airbus for the purchase due to Boeing's lack of aircraft in the mid-market range, a source close to the matter told AFP on condition of anonymity.
"There are no aircraft currently offered by Boeing that can replace the 757," the source said, adding that negotiations between Airbus and United began several months ago.
Boeing, which is currently focused on returning its MAX aircraft to the sky, has already postponed possible announcement of a new model aircraft (NMA) until next year.
The manufacturer recently presented the design to various airlines, industrial sources told AFP.
Airbus decided to no longer publish the catalog prices for its aircraft beginning in 2019. However, the A321XLR is a long-range version of the A321, whose unit value was $129.5 million in 2018.
United has meanwhile postponed receipt of its first 45 Airbus A350 long-haul aircraft by 5 years.
The company, which ordered the planes in 2017, said it now plans to have them delivered in 2027 instead of 2022.
Agence France-Presse
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
NAIROBI - The families of victims of an Ethiopian air disaster on Thursday criticized Boeing's plan to donate $100 million to unspecified charities and communities affected by 2 crashes, saying it was too vague and that families should have been consulted first.
Some of the families said Wednesday's announcement from the US planemaker also triggered an avalanche of unwelcome phone calls from relatives and acquaintances who believed they had just received compensation.
"This is unacceptable. They did not consult us, we only learned this morning," said Quindos Karanja, a retired Kenyan teacher whose wife, daughter and 3 grandchildren were killed in the March 10 disaster. "This is not in good faith."
The crash of the Boeing 737 MAX jet came only 5 months after the same model of plane plunged into the sea off Indonesia. The 2 disasters killed a total of 346 people, triggered the global grounding of the aircraft and wiped billions off Boeing's market value.
"It's like adding salt to a wound... They haven't consulted any families," Kenyan lawyer Kabau-Wanyoike, whose younger brother George was aboard the doomed Ethiopian Airlines flight, told Reuters. Her family has lodged a lawsuit against Boeing, and she said they wanted answers on aviation safety.
"My parents are already being disturbed by people calling to ask 'has the money come?'," she added.
Another Kenyan man, who asked not to be identified, said his family was also concerned about security in a nation where kidnappings for ransom occur frequently.
"Boeing also want to show they have a good name, but they could be putting the victims at risk," he said, adding he did not oppose Boeing supporting charities, but that it could be done more discreetly.
Boeing said the multi-year payout was not connected to the lawsuits that more than 100 families have filed against it.
It did not specify how the money would be divided, which organizations would benefit or how it might relate to victims' families.
Nomi Husain, a US lawyer representing 7 families, said his clients, including the Kabau family, had all reacted badly to the announcement.
"They are saying: 'If they want to help us, don't they know who we are? Don't they have our names?'" he said.
"They can’t change the storyline that they put profit over safety."
Asked to comment, a Boeing spokesman said: "All I can add to our release is that the pledge is absolutely independent of the lawsuits filed. This step will support education, hardship and living expenses for affected families, community programs, and economic development in those communities."
source: news.abs-cbn.com
CHICAGO, United States - Boeing co-chief executive Dennis Muilenburg will face shareholders on Monday for the first time since 2 fatal crashes that led to the 737 MAX's grounding worldwide and triggered investigations, lawsuits and a sharp loss in share value.
Battling the biggest crisis of his tenure, Muilenburg will try to bolster investor confidence in the manufacturer's future as well as that of its fastest-selling airplane as questions linger over the model's safety.
Family and friends of 24-year-old American Samya Stumo, one of the victims of the crash of an Ethiopian Airlines 737 MAX on March 10, will hold a silent protest outside the meeting site.
That crash, which killed all 157 on board when it plunged to the ground shortly after takeoff, came five months after a similar Lion Air nose-dive that killed all 189 passengers and crew.
Muilenburg will hold his first press conference since the grounding after the general annual shareholder meeting in Chicago, scheduled for (10 p.m. in Manila).
Boeing is under pressure to deliver a software fix and a new pilot training package that will convince global regulators, and the flying public, that the aircraft is safe to fly again.
The US Federal Aviation Administration could clear Boeing the 737 MAX jet to fly in late May or the first part of June, 2 people familiar with the matter said on Friday, though Boeing has yet to submit the updated software and training for review.
Some pilots have warned that draft training proposals do not go far enough to address their concerns.
Meanwhile, deliveries of the 737 MAX, which airlines around the world had been relying on to service a growing air travel industry for years to come, are on hold.
Last week Boeing abandoned its 2019 financial outlook, halted share buybacks and said lowered production due to the 737 MAX grounding had cost it at least $1 billion so far.
Shareholders have filed a lawsuit accusing the company of defrauding them by concealing safety deficiencies in the plane. The model is also the target of investigations by US transportation authorities and the Department of Justice.
Muilenburg is Boeing's chairman and president in addition to CEO, and faces calls that could strip him of one of those titles at Monday's meeting. Boeing has recommended against the move.
Boeing must also contend with lawsuits filed on behalf of dozens of victims of the 2 crashes, including the family of Stumo, who are asking whether the Ethiopian disaster could have been prevented after what happened to Lion Air.
"Those in charge of creating and selling this plane did not treat Samya as they would their own daughters," her mother Nadia Milleron told reporters in early April.
Shares in the company, worth $214 billion, have lost nearly 10 percent of their value since the March 10 crash.
source: news.abs-cbn.com
NEW YORK -- Boeing faces a wave of flight cancellations by US airlines and pressure from President Donald Trump to rebrand its top-selling 737 MAX aircraft, a month after the plane was grounded worldwide in the wake of two deadly crashes.
American and Southwest Airlines say the grounding will disrupt scheduled flights through the summer, during the peak travel season which helps generate corporate profits.
American is canceling all 737 MAX flights through August 19 while Southwest, which owns the largest 737 MAX fleet, with 34 planes, is canceling them until Aug. 5.
United Airlines said it had previously used spare aircraft and "creative solutions" to keep from having to cancel flights but cancellations in the busy summer travel season could no longer be avoided.
"No one knows when the FAA review will be complete, so we've decided to pull MAX flights out of our schedule through early July," a spokesperson told AFP on Monday.
In all, an average of 275 flights a day will be canceled, which are likely to put a dent in airline profits and could cause the companies to raise airfares.
American already cut a key industry revenue metric -- Total Revenue per Available Seat-Mile, or TRASM -- saying it will rise one percent in 2019, down from a prior estimate of two percent.
Southwest is allowing affected passengers to reschedule flights at no additional cost.
"Neither Airbus nor Boeing like cancellations and there are stiff contracts which make this very difficult," said Scott Hamilton, managing editor of the aviation news site Leeham News and Analysis.
"The companies will swap airplane types, however, if it comes to this."
All 737 MAX aircraft have been banned from the world's skies since mid-March after suffering two fatal crashes less than five months apart: a Lion Air flight crashed in the Java Sea in October, leaving 189 dead, and the Ethiopian Airlines crash on March 10, which killed 157 people.
Crash investigators have zeroed in on the planes' anti-stall system, the Maneuvering Characteristics Augmentation System, or MCAS.
And Boeing, which has already ceased 737 MAX deliveries and slowed the pace of production, a buildup of delays could increase the penalties it must pay client airlines, Hamilton said.
Trump tweeted early Monday that Boeing had to give its scandal-stricken aircraft a new image.
REBUILDING TRUST
"What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name," he said.
But Hamilton said Trump was right to doubt his own expertise.
"Trump is a boob. Boeing isn't going to rebrand the 737," Hamilton said, pointing to Boeing's log of more than 4,600 backorders, a key sales revenue driver, and adding that the order cancellations so far were "inconsequential."
Aviation analyst Richard Aboulafia of Teal Group agreed.
"Pretty much all of President Trump's pronouncements on aviation are safely and best ignored," he said.
Boeing is finalizing software upgrades for the MCAS, which it has pledged to submit to regulators in the coming weeks so that the 737 MAX grounding order can be lifted.
"We're focused on testing and implementing the software update and rebuilding the trust of our airline customers, pilots and the traveling public," a spokesperson told AFP.
"We know we have a deep responsibility to everyone who flies on our airplanes to ensure that the MAX is one of the safest aircraft ever to fly."
Rebranding the aircraft would impose additional costs on the airlines which would be required to fully retrain pilots, while an updated model involves less intense additional training.
Flight cancellations show the airlines, that had hoped to have the planes back in the air by May, now expect it will be longer before the aircraft can return to service.
Aviation analysts largely agree and expect the grounding to be lifted by the end of August.
In the meantime, the industry is working to regain the trust of the flying public.
The US Federal Aviation Administration, which must certify the 737 MAX's airworthiness, released a video last week in which its interim chief Daniel Elwell said the agency was working to keep pilots informed.
The FAA also said the agency would not rush to get the 737 MAX flying again.
source: news.abs-cbn.com
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
