US grounds Boeing 737 Max planes, citing links between 2 fatal crashes

The Federal Aviation Administration on Wednesday grounded all Boeing 737 Max jets in the U.S., citing new evidence that showed similarities between two fatal crashes of the popular planes that have killed 346 people in less than five months.

The move marks a stunning turnaround for the U.S., which has stood by the American-made aircraft as dozens of countries around the world grounded the planes.

The crash of Ethiopian Airlines Flight 302 on Sunday came less than five months after a Lion Air Boeing 737 Max 8 — the same type of plane — plunged into the Java Sea minutes into the flight from Jakarta, Indonesia, killing all 189 people on board. Both planes were new, delivered from Boeing just months before their doomed flights.

New satellite data shows the plane's movement was similar to the October crash, the FAA's acting administrator Daniel Elwell told reporters on a call Wednesday. The agency also took physical evidence into account, but Elwell declined to elaborate.

"It became clear the track was very close and behaved similarly to the Lion Air flight," Elwell told reporters on a call Wednesday. "My hope is the FAA, the carriers, the manufacturers and all parties will work very hard to make this grounding as short as possible so that these airplanes can get back up in the sky."

The FAA, which is investigating the crash along with Ethiopian authorities and the U.S. National Transportation Safety Board, said the grounding will remain in effect during the investigation.

The FAA did not have enough data to warrant grounding the planes earlier, he said. "We are a fact-driven, a data-based organization," said Elwell. "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."

The NTSB said it is sending a three-member team to help investigators download and analyze data from the Ethiopian Airlines plane's black boxes, which arrived in France on Thursday. Those devices contain flight data and cockpit voice recordings that will likely shed light on what brought down the Ethiopian Airlines plane.

Boeing said it recommended taking the 737 Max planes out of service out of an "abundance of caution" after talking with U.S. aviation regulators.

"On behalf of the entire Boeing team, we extend our deepest sympathies to the families and loved ones of those who have lost their lives in these two tragic accidents," CEO Dennis Muilenburg said in a statement. "We are doing everything we can to understand the cause of the accidents in partnership with the investigators, deploy safety enhancements and help ensure this does not happen again."

President Donald Trump said he spoke with Boeing's CEO, Transportation Secretary Elaine Chao and the acting head of the Federal Aviation Administration, Daniel Elwell about the decision.

Al Drago | Bloomberg | Getty Images
U.S. President Donald Trump said the U.S. is grounding flights by Boeing Co.'s 737 Max aircraft following the model's second crash in five months on Sunday.

"They are all in agreement with the action. Any plane currently in the air will go to its destination and thereafter be grounded until further notice," Trump told reporters at the White House on Wednesday.

Of the more than 370 Boeing 737 Max jets in global fleets, 74 are flown by U.S. airlines, according to the FAA. Those include United Airlines, Southwest Airlines and American Airlines. Southwest Airlines' fell by about 1 percent while Delta was about flat.

Boeing investors lost $26.6 billion in the first two trading days this week with shares sliding 11 percent from $422.54 Friday to $375.41 at Tuesday's close. The company's market value fell from $238.7 billion on Friday to $212.1 billion by the end of Tuesday. Shares of Boeing slipped by more than 2 percent after Trump's announcement, but closed up 0.5 percent for the day at $377.14.

It is very uncommon, but not unprecedented, for the FAA to ground all jets of a certain type. In 2013, the agency ordered the then-new Boeing 787 Dreamliners grounded because of lithium-ion battery malfunctions. (They were flying again about three months later.) However, in that case, European regulators and other airlines followed the FAA's lead. With the Boeing 737 Max planes, the U.S. grew increasingly isolated as country after country decided to ground the jets.

Bloomberg | Bloomberg | Getty Images
Southwest Airlines planes stand on the tarmac at San Francisco International Airport Jan. 19, 2018.

Lawmakers and labor unions representing flight attendants urged airlines and the government to ground the planes. Countries from India to Italy had decided to take the planes out of service, unnerving travelers and putting airlines in the tough position of alienating customers and defending the safety of the plane.

United and Southwest loosened some of their ticket change fees for flyers nervous about traveling on the plane.

The pilots at the controls of fatal Lion Air flight battled an automated, anti-stall system, possibly due to erroneous information from the plane's sensors, investigators have indicated. Boeing added the Maneuvering Characteristics Augmentation System, known as MCAS, to the new 737 models, which automatically pushes the nose of the plane downward to help it recover from a stall. If the data the sensors are receiving is inaccurate, the results could be catastrophic.

Boeing earlier this week said it is working on a software fix as well as updates to pilot manuals and training and the FAA said it would mandate those changes by April.

The FAA's Elwell said the agency did not tie its order to the software changes Boeing is preparing but said he is confident it would make it "far less likely" that pilots will have to deal with that kind of malfunction, adding that he is "absolutely" confident the federal certification of the Boeing planes. He said that the 35-day government shutdown did not delay the addition of the software to the Boeing planes.

While passenger flights of the Boeing 737 Max models are banned under the order, Boeing can still operate test flights of the aircraft. The manufacturer is currently testing a smaller model, the 737 Max 7.

Before they were delivered, American Airlines ordered optional cockpit displays for its Boeing 737 Max planes that show if the plane's so-called angle of attack — its angle relative to the air — isn't consistent with sensor data. Southwest told CNBC it added this feature after the Lion Air crash.

American has 24 of the planes in its fleet of nearly 1,000 aircraft and said it would comply with the FAA's order and rebook passengers.

— CNBC's Phil LeBeau and Meghan Reeder contributed to this report.

Correction: The FAA grounded all Boeing 737 Max jets in the U.S. An earlier version mischaracterized the move.

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