A Boeing Co. 737 Max 7 jetliner sits on the tarmac during preparations ahead of the Farnborough International Airshow (FIA) 2018 in Farnborough, U.K. (Photographer: Simon Dawson/Bloomberg)

Fate of 737 Max Could Turn On a Single Trump Tweet

(Bloomberg Opinion) -- Will the U.S. Federal Aviation Administration join regulators in other countries and order a global grounding of the 737 Max 8, the Boeing Co. airliner involved in two similar crashes in five months? The answer isn’t as clear-cut as some might think.

While the agency issued a notice Monday to the Max 8’s 59 operators stating its “continued airworthiness,” the decision on whether to stand by that call depends as much on political judgment as any yes-or-no technical assessment.

Airlines and regulators in other countries are already voting with their feet. China, Indonesia, Singapore and Australia have suspended operations of 737 Max variants, while Ethiopian Airlines Group, Grupo Aeromexico SAB de CV, Brazil’s GOL Linhas Aereas Inteligentes SA and South Korea’s Eastar Jet Inc. have grounded their own planes. After one of its own 737 Max planes crashed in October, PT Lion Mentari Airlines is considering a switch to Airbus SE, Bloomberg News reported citing a person familiar with the matter. As a result, about a third of the 350-strong global fleet is already out of action. 

Fate of 737 Max Could Turn On a Single Trump Tweet

Although the FAA has the most important position as the home-country regulator that certifies Boeing planes, decisions by other nations have a steamrolling effect that could force its hand.

In truth, no one can be 100 percent sure at present whether the striking similarities between the crash of Ethiopian Airlines Flight 302 on Sunday and Lion Air’s Flight 610 are merely an unfortunate coincidence, or the sign of a deeper common problem.

In that murk of uncertainty, Boeing and many of its airline customers will want the regulator to wait for substantial evidence to emerge before taking the drastic step of suspending flights. Passengers and air-crew unions, on the other hand, will want to be sure that flights are safe, and seek a more precautionary approach. Balancing those two priorities isn’t easy: If the FAA is perceived to have put lives at risk because it feared acting too aggressively against Boeing, the damage to the reputation of both could be devastating.

There’s no technical trigger for a grounding order. Instead, it’s a judgment call by the department in question, complicated by the fact that the FAA currently doesn’t have a permanent administrator. U.S. Secretary of Transportation Elaine Chao, who’s responsible for the agency and whose views would probably be decisive, seems to be taking a wait-and-see approach. Boeing’s Chief Executive Officer Dennis Muilenburg, meanwhile, has worked hard to be close to President Donald Trump, who could decide the issue one way or another with a single tweet.

One point worth bearing in mind is that the agency has been reviewing the performance of the 737 Max 8 for almost five months since the Lion Air crash, including the behavior of the angle-of-attack sensors and Maneuvering Characteristics Augmentation System that appear to have malfunctioned in that incident. That should lend weight to its confidence in the plane’s continued airworthiness: It’s hard to believe the agency would now be backing up the 737 Max’s performance if any scintilla of doubt remained.

Even so, the FAA has in the past been accused of being too lenient. Whistle-blowers in 2008 alleged the regulator looked the other way when Southwest Airlines Co. neglected to inspect and maintain its planes properly.

In the case of the 787 Dreamliner, which was grounded for 123 days in 2013 after fires broke out in its on-board lithium-ion battery packs, a review by the National Transportation Safety Board found that the agency had lacked the technical expertise to evaluate the safety of the new technologies used, and was too trusting about Boeing’s assumptions. At the same time, others have argued the FAA overreached in that grounding order: For all the angst at the time, the 787 has gone on to be a popular plane with an excellent safety record.

Fate of 737 Max Could Turn On a Single Trump Tweet

“It’s wrong to rush to judgment” in the 737 case, Kenneth Quinn, a partner at Baker & McKenzie LLP and former FAA chief counsel who acted for Boeing’s battery manufacturer GS Yuasa Corp. in the Dreamliner case, said by phone Monday. “It’s a very complex aircraft operated by human beings. Let’s let the facts be identified and analyzed, and not let political or media pressure interfere with the process of the investigation.”

That’s a worthy ambition, but with tens of thousands of people trusting their lives to the 737 Max every day, it’s hardly surprising if passengers expect a more proactive approach. The public at large accepts the inherently risky activity of flying hunks of metal filled with kerosene and people over the world’s biggest cities. That acceptance is dependent on the belief that airlines, manufacturers and regulators have zero tolerance for risk. If it wants to maintain that faith, the FAA had better be confident in its judgment call.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

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