Boeing CEO denies any ‘technical slip’ in 737 MAX crashes, as grounding cuts into profit and cash reserves
Muilenburg conceded that erroneous information was fed to the airplanes on both flights by a faulty sensor on the fuselage, and that this false signal activated a new flight-control system on the MAX that repeatedly pushed the jet's nose down.
Still, he adamantly denied that any fault in the design led to the deaths of the 346 people aboard the two planes.
"There is no technical slip or gap here," Muilenburg said on an early morning conference call with
He added that "actions not taken" contributed to the crash, a seeming reference to
A
Yet Muilenburg's remarks make clear that though he has publicly declared
Aviation analyst
That's unfortunate for
"That's nonsense. This is a good product with a flaw, a mistake made," said Aboulafia. "The best way forward for
"But the lawyers seem to be preventing that better outcome," he said.
Financial hit
Muilenburg's comments came as
The worldwide grounding of the 737 MAX has quickly rippled through
After the earnings news,
In a note to investors,
But he added that the financial impact of the MAX grounding remains unclear because no one knows yet when it will lift.
"Until we get more clarity, we could see the shares stuck in a holding pattern," Stallard wrote.
Following the crash of an
The financial impact was relatively small because the MAX grounding came near the quarter's end and the ensuing production slowdown began in April. Next quarter will see a bigger hit.
With cash draining, Chief Financial Officer
Even after the grounding of the MAX is lifted, it will take time for
"We expect our financial results to continue to be adversely impacted until we safely return the 737 MAX to service, ramp up production rates and resume deliveries to customers," Smith said.
A software fix, or an improvement?
Getting the plane back in the air is top priority for Muilenburg.
"We want to make sure we can get back up and flying safely. And we know we have some work to do to earn and re-earn the trust of our customers and the flying public," he said.
He added that
Muilenburg said more than 135 test and production flights with the software update have been completed, and
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While these changes address what seem like specific flaws in the design that were missed during certification, Muilenburg insisted that "both accidents were a sequence of events" in which MCAS was only one factor, and that the MCAS update represents an improvement in safety, not a fix for a fatal flaw.
"There are areas where we can improve, and that is the source of the software update," he said
"There was no surprise or gap or unknown here or something that somehow slipped through a certification process," Muilenburg added. "We know exactly how the airplane was designed. We know exactly how it was certified. We've taken the time to understand that. That has led to the software update."
Muilenburg said Wednesday that the crisis over the 737 MAX has not affected development of the 777X, which is due to have its first flight soon.
The first two flight-test 777Xs have already rolled out of the factory, and the third and fourth are under assembly. That new widebody jet's planned entry into service next year remains unchanged, he said.
During the first quarter, a new order for 18 777X airplanes from
Likewise, Muilenburg said
However, no decision has been made yet to go forward with the NMA and right now, he conceded, the 737 MAX is the primary focus. The aviation industry had been anticipating the launch of he 797 at the Paris Air Show in June, but it seems likely that decision could be pushed out now.
"Certainly, the higher priority, the highest priority for us, is the 737 MAX safe return to service," Muilenburg said.
Meanwhile,
And 787 program costs deferred into the future dropped by just over
During the quarter,
However, though Muilenburg spoke of a "healthy global demand" for commercial jets, Smith did concede that
However, the troubled KC-46 aerial refueling tanker program, which delivered just seven tankers to the
Free cash flow -- a key quarterly financial metric that investors focus on, which is the company's cash receipts minus its cash operating expenses and its investments in plant and equipment -- which had been surging to record levels, this quarter was down
As a measure of its operational performance
Muilenburg said that even as
206-464-2963 or [email protected]; on Twitter: @dominicgates.
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