After two fatal Boeing plane crashes, the world turned on the US

  • Countries and airlines around the world have grounded Boeing 737 Max planes after two fatal crashes.
  • The United States, usually the leader in aviation safety, had been a notable holdout.
  • The FAA ultimately grounded the planes on Wednesday afternoon, joining dozens of other countries.
A Lion Air Boeing Co. 737 Max 8 aircraft, right, stands on the tarmac at Soekarno-Hatta International Airport in Cenkareng, Indonesia, on Tuesday, March 12, 2019.
Dimas Ardian | Bloomberg | Getty Images
A Lion Air Boeing Co. 737 Max 8 aircraft, right, stands on the tarmac at Soekarno-Hatta International Airport in Cenkareng, Indonesia, on Tuesday, March 12, 2019.

China moved first. Indonesia followed. Then Singapore and Australia.

By midday Wednesday more than 30 countries and airlines from India to Italy had banned Boeing 737 Max jets from their skies after a second fatal crash of one of the planes brought the death toll to 346 people. The deadly crashes raised concerns around the world that they may have both been caused by software Boeing added to the modern version of its workhorse jet.

But the U.S. aviation regulator repeatedly stood by the American-made plane, even as close allies like the European Union decided to suspend the plane from operating there.

It left the Federal Aviation Administration, which has presided over an unprecedented period of commercial airline safety at home, in an unfamiliar state: alone.

Knee-jerk reactions

Had such a worldwide break from U.S. aviation officials happened before?

"Never," said John Goglia, a former member of the U.S. National Transport Safety Board. He's investigated accidents including the July 1996 crash of TWA Flight 800 that killed all 230 people on board. Goglia called the moves by other countries to ground the 737 Max planes "knee-jerk reactions" since details of what could have caused the Ethiopia crash were still scarce.

The U.S. had for decades taken the lead in issuing aviation safety guidance to carriers and countries. Countries instead followed China, set to become the world's biggest air travel market by the middle of the next decade, according to the International Air Transport Association.

In January 2013, battery fires on new Boeing 787 Dreamliners prompted the agency to ground the planes that month. European aviation officials followed suit from the FAA, which had certified the plane. The 787s were airborne again by April of that year after FAA deemed the planes airworthy after a fix from Boeing. In 1979, the FAA grounded McDonnell Douglas DC-10 planes after deadly crashes.

Trump announcement

On Wednesday afternoon, Canada had joined most of the world in grounding the planes, citing new satellite data.

Hours later President Donald Trump said that the U.S. would also ground the planes, a type of announcement usually made by the FAA. The FAA's acting administrator Daniel Elwell later told reporters that this new satellite-data and physical evidence more closely linked the Ethiopian Airlines crash of the Boeing 737 Max on March 10 to that of Lion Air Flight 610 that plunged into the Java Sea in Indonesia last October, killing all 189 aboard.

He defended the FAA's decision to hold off on grounding the planes.

"We are a fact-driven, a data-based organization," said Elwell told reporters after the FAA issued its order to ground the planes in the U.S. "Since this accident occurred we were resolute in our decision that we would not take action until we had data to support taking action. That data coalesced today and we made the call."

Boeing said it recommended the decision to the FAA.

U.S. inaction

The inaction from the U.S. had drawn criticism from some, like former Transportation Secretary Ray LaHood, whose FAA grounded the Dreamliners in 2013, before the FAA made the call that it should have grounded the planes. "Safety can never be compromised," he told CNBC.

Others, including former Continental Airlines CEO Gordon Bethune, who previously oversaw production of 737s and 757 at Boeing, said the U.S. should wait until it had more information.

After the FAA decided to go ahead and ground the jets, Elwell told CNBC's Closing Bell in an interview that the FAA, which certified the 737 Max plane, "didn't feel global pressure." The Max is a new variant with larger engines, made by a joint venture of General Electric and France's Safran, and other features and rolled out in 2017.

On Monday and Tuesday, the FAA said it had no information to warrant grounding the Boeing 737 Max planes, even as other nations and airlines took that step. Of the more than 350 of the planes that have been delivered to carriers worldwide, 72 are in U.S. airline fleets, including those of American, United and Southwest. Boeing has 4,600 more on order globally.

Chaos

As the U.S. grew more isolated on the issue, airlines were in the awkward position of at once defending the airplane as safe and changing for free the tickets of travelers who said they were too scared to fly it. Flight attendants' unions asked for the planes to be grounded and told members they wouldn't be forced to work a 737 Max flight. Some United flight attendants reassigned themselves on other aircraft, according to the Association of Flight Attendants-CWA, their labor union.

"When FAA got behind the court of public opinion everything else becomes optics over rational decision making," said Robert Mann, a former TWA executive and an airline consultant.

Boeing shares lost more than 10 percent in the week, shaving $24.6 billion off its market capitalization.

Lawmakers, travelers and even some airline employees, including flight attendants, urged the government and carriers to park the planes until more was known about what brought down the Ethiopian Airlines' four-month-old Boeing 737 Max 8 on Sunday shortly after takeoff, killing all 157 people on board.

"I know this tragedy is especially challenging coming only months after the loss of Lion Air Flight 610," Boeing's CEO Dennis Muilenburg told employees in an email. "While difficult, I encourage everyone to stay focused on the important work we do. Our customers, business partners and stakeholders depend on us to deliver for them."

The FAA's about-face

Then the U.S. changed its position.

At American's nerve center, a cavernous, 150,000-square-foot facility at its Fort Worth, Texas headquarters where the airline monitors its some 6,700 flights a day, about a dozen members of American's staff and executives and like Kerry Philipovitch, senior vice president of customer experience, assembled in a room used for crises like the 2016 Brussels bombing, where they were later joined by CEO Doug Parker, to view on a wall full of screens where its 24 Boeing 737 Max planes were and how to rebook passengers whose trips were upended by FAA's immediate order.

The airline had been discussing contingency plans since China grounded the planes on Monday, according to a person familiar with the matter. American uses the planes for 85 flights a day and began canceling flights after the FAA order. Southwest took similar steps. The three U.S. airlines flying the planes said they supported FAA's decision.

FAA and Boeing

The FAA, which has had Elwell as acting head since Michael Huerta stepped down in January 2018, was the body that certified the one to certify the best-selling plane that started flying in commercial fleets less than two years ago.

That is drawing questions from lawmakers. Investigators in the Lion Air crash have indicated that the pilots were battling an automated anti-stall system that Boeing added to the new 737 Max jets before they started flying in 2017.

The plane is a new model of Boeing's 737, an aircraft that has been flying since the 1960s and is the best-selling of all time. Boeing, facing competition from European archrival Airbus, whose A320neo, a more fuel-efficient version of its single-aisle plane that had just won orders from longtime Boeing customer American Airlines, ordered up a similar fuel-saving engine upgrade. Boeing also changed the wing and landing gear. Airbus's newly re-engined A320s started flying more than a year before Boeing's 737 Max.

Because of the changes it made to the planes, Boeing also added a system, known as the Maneuver Characteristics Augmentation System, or MCAS, to detect whether a plane is in a stall and automatically push the aircraft's nose down, the way planes recover from such a position. Investigators are looking at whether the sensors on the doomed Lion Air plane erroneously showed the aircraft was in a stall.

'Absolutely shocked'

Some pilots said they did not know the MCAS system existed until after the Lion Air crash.

"It blew us away. It absolutely shocked us," said Dennis Tajer, an American Airlines Boeing 737 pilot an a spokesman for the airline's union, the Allied Pilots Association.

Switching from previous models of the 737 to the 737 Max entailed a 56-minute iPad training session, Tajer said. The FAA did not require additional training under the certification of the plane.

On an earnings call in April 2017, Boeing's CEO Muilenburg was asked how deregulation early in Trump's term affected the company.

Muilenburg replied that "the administration has been very engaged across government agencies and with industry to find ideas and ways and opportunities to simplify and streamline.

"Things like FAA certification processes is one place that we're seeing some solid progress," he said. "That's helping us more efficiently work through certification on some of our new model aircraft, such as the Max, as it's going through flight test and entering into service."

The FAA had signed off on the 737 Max 8 planes in March 2017.

Boeing met with American's pilots as well as with their counterparts at Southwest after the Lion Air crash to discuss the system.

Boeing told the pilots they were working on a fix to the plane's software, which the FAA confirmed when it had said on Tuesday that the planes were still airworthy. Tajer said pilots felt renewed confidence following the Boeing meeting in November.

Demanding answers

The FAA is mandating those changes along with tweaks to training and manuals for the 737 Max planes. It expects to sign off on the software fixes on March 25, according to a person familiar with the matter, opening the door for it to be rolled out onto aircraft.

Acting FAA administrator Elwell said the 35-day partial government shutdown, which furloughed FAA safety inspectors, did not delay the software changes. (The shutdown ended hours after several FAA's air traffic controllers, working without pay for more than a month, did not show up for work, snarling air travel.)

Now lawmakers are demanding answers.

Rep. Peter DeFazio, D-Ore., the chairman of the House Committee on Transportation and Infrastructure called for an investigation into the certification process for the plane, which propelled Boeing to a record $100.1 billion in revenue last year. The FAA's Elwell told reporters he was still confident in the certification for the plane.

Sen. Roger Wicker, a Mississippi Republican and chair of the Senate Commerce Committee said he's planning a hearing on aviation safety because of the two crashes.

While the issue is ongoing, Boeing said it would suspend deliveries of the Max planes.

Boeing said its planned changes will make "an already safe aircraft even safer."