As I said when this all first started, Boeing was being treated very unfairly when it had its planes grounded for the 737 MAX after the crash of the Ethiopian Airlines Flight 302 which killed 157 people. As is the trend of the world, those most responsible for everything are those doing something and in this day and age in vilifying corporations to the whims of every below the line thinker in existence, Boeing has been getting a very raw deal. I have contended that the cause of the crash and that of the Lion Air 737 which crashed in October of 2018 was not the fault of the plane, but of the pilots who were grossly inexperienced due to their countries of origin. It’s not as if the pilots in these developing countries have had the benefit of a great military career as fliers to become pilots of these giant flying buses. In a lot of ways they are training for these jobs in the way that some people train for a new fast food job in the United States. The pressure to fulfill the market needs of countries that do not have a deep history with emerging technologies, such as airplane flight, is to put more computer automation into the flight scenarios. We expect too much out of the automation and as in the case of these two 737 MAX 8 crashes, the pilots just weren’t experienced enough to overcome faulty sensors that threw off the autopilot capabilities of the craft. An over reliance on computers is the real problem, and that will happen again in the industry. When mechanical things fail, as they often do, there needs to be a good pilot on hand to help overcome the situation, especially on a big complicated craft hauling around so many people. There are just too many opportunities for error not to have experienced, well-trained pilots flying these airplanes and the countries where these airlines are located just don’t have a history of working with technology, so it’s quite a challenge.

Granted Airbus has the same challenges, and they haven’t been exposed to crashes like what Boeing has experienced. If Boeing is guilty of anything its in expecting that pilots reading their manuals would know how to overcome simple in cockpit problems such as autopilot malfunctions because in the United States most of the airline pilots have a history in either military or civilian aviation. There is a culture in place in America that produces pilots and Boeing is used to servicing the industry from that vantage point. However, the airline industry is growing tremendously over the next 20 years with a predicted rate of need for roughly 37,400 new aircraft to be built over that time span and most of that growth is in emerging markets, so if Boeing wants to compete in that global demand, it has to build planes that very average pilots can fly, and that is the real cause of these tragedies, trying to compensate for massive inexperience and the airlines needs to put pilots in planes that can essentially fly themselves. Airbus has perhaps been more successful in achieving that demand, but Boeing pushed their 737 MAX technically adding to the variables. The Boeing plane is a great product, but is it ready to fly itself without a pilot, probably not.

But as I said three weeks ago when the planes were first grounded, the financial cost to Boeing is and will continue to be catastrophic and what’s pathetic is that nobody seems to care. Certainly not the loser politicians who have been advocating law suits and further punishments against Boeing. The company itself is losing billions of dollars with this grounding in cancelled contracts and the hefty price tag of $60 million per day in lost revenue across the industry with the roughly 400 so far delivered 737 MAX jets sitting on the ground doing nothing. There are orders for 5000 more 737 MAX planes to be built over that 20 year span, and if those orders convert over to Airbus, it will be devastating for the Boeing Company, because their preparation for this next generation of aircraft sales has been this particular market approach.

What has been so foolish is the assumption that Boeing is so rich as a company that they can afford this grounding, and all the law suits that are being tossed in their direction due to the deaths of the people on those two crashed flights that have caused this grounding. Boeing reported $10.5 billion in profits in 2018 which is consistent with previous years, but what nobody seems to understand is that playing the airplane building game is expensive. Sure $10 billion dollars sounds like a lot of money, but it evaporates quickly in a publicly traded company that has so many top-heavy expenses. Boeing sells each MAX 8 aircraft at a price tag of $92.2 million each. It only takes ten airplanes to generate $1 billion dollars. But we aren’t talking about selling popcorn here, there are massive expenses into building these planes and the margins have to be decent to leverage the company against the enormous costs of when things go wrong during the manufacturing process, such as labor strikes, supply shortages, and delivery problems. It doesn’t take long to suck up $10 billion dollars in profit when the scale of manufacturing is so high. So when people say that Boeing is a rich company that can afford to give up their profits for every little complaint, they don’t understand the situation at all. The cost to the company isn’t just another excuse for liberal wealth redistribution hidden behind a veil of safety, it is a perilous drain of projected financial resources that the company has been counting on to justify decades of investment that they have made to bring this MAX 8 plane to life so that countries like Malaysia and Ethiopia can have an opportunity to even have an airline industry. It is very disingenuous to put all the blame on Boeing and expect them to pay the price for what essentially amounts to poorly trained pilots by the airlines operating in these developing countries who themselves rushed to market without being truly prepared.

There isn’t room for airline crashes and they should never happen. When people purchase a plane ticket, they should never expect to crash and die. The regulations in the industry are understandably rigorous, and that is part of the enormous cost of compliance that also eats into the profits of a company like Boeing just for being in the business. If the FAA had become a little cozy with Boeing that is not the fault of anybody. Without Boeing, the FAA has very little to do, they need each other so understandably relationships need to be productive. To expect a regulatory agency to impose itself further on a company like Boeing is ridiculous. Only people not used to making anything in life would think a tighter regulatory environment is productive. The bottom line in this case of the grounded 737 MAX 8 planes is that Boeing was trying to deliver a plane that needed to essentially fly itself because the pilots were not able to do it themselves. The pilots were too dependent on automated systems, and that may be the demand of tomorrow’s market, but it should be understood that the learning curve is going to be demanding and mistakes will happen. When mistakes do happen, experienced and well-trained pilots need to be there to save the day. And in the case of these crashes, they weren’t which was the fault of the airlines which put those planes in the air. Boeing isn’t making yet planes that fly themselves. They are trying, but the technology just isn’t there yet. But the cost of these political groundings to them has been catastrophic and very unfair to. And it’s a shame that more people just don’t understand what all this has done to a great American company. But then again, maybe they do.

Rich Hoffman

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