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Boeing : FAA Has 'Credibility Problem' Over Boeing 737 MAX Safety Approval, House Panel Chairman Says -- 4th Update

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05/15/2019 | 05:33pm EDT

By Andy Pasztor and Ted Mann

WASHINGTON -- The Federal Aviation Administration has a "credibility problem" related to its safety certification of Boeing Co.'s 737 MAX aircraft, according to the chairman of a House panel.

"The FAA needs to fix its credibility problem," Rep. Rick Larsen (D., Wash.), chairman of the aviation subcommittee of the House Transportation and Infrastructure Committee, said at a hearing Wednesday. The aircraft has been involved in two fatal crashes.

Members of the committee also voiced frustration at the progress of their oversight investigation into Boeing, the 737 MAX aircraft and the FAA's approval of the airliner to enter service.

"The FAA has only begun to turn over documents which we requested months ago," Rep. Peter DeFazio (D., Ore.), the transportation committee's chairman, said at the hearing. "Boeing has yet to provide a single document."

"Boeing continues to support the ongoing accident investigations and is committed to working closely with members of Congress, their staff and relevant officials," a spokesman for the company said. "Safety is our top priority when we design, build, deliver and maintain Boeing aircraft."

Members of the committee also have focused on how the FAA allows third parties, including manufacturers like Boeing, to designate some safety certifications.

A recent Wall Street Journal report cited an internal review that found senior FAA officials didn't participate in or monitor crucial safety assessments of the flight-control system later implicated in the two crashes.

"If that is in fact true, the [designation] process is not working as Congress intended," Mr. Larsen said.

Acting FAA Administrator Daniel Elwell said he was "not aware of an internal assessment that reaches that conclusion."

Mr. Elwell ordered the initial assessment after the first 737 MAX crash in Indonesia last October, and its findings have been shared with officials at the Transportation Department, according to government and industry officials.

"If we have robust oversight...it's a good system," Mr. Elwell said of the designation procedure. "But it can always be made better."

The nominee to succeed him as the agency's permanent head, Stephen Dickson, offered his own backing on Wednesday for continuing to use outside parties in the certification process.

Mr. Dickson told a Senate confirmation hearing that he favored a continued role for the private sector rather than just "throwing resources" to expand the FAA's oversight. However, he said he would examine the level of designation that the FAA afforded Boeing in the certification of the 737 MAX. Mr. Dickson said he expected the Transportation Department's special committee examining the MAX's certification to issue its own recommendations, at which point he would take any necessary corrective action.

"I am not happy with a 13-month gap between finding that anomaly and us finding out about it," he said, referring to a time gap earlier reported by the Journal. "We will make sure software anomalies are reported to us more quickly."

Committee members questioned Mr. Elwell on why the FAA was slower to ground the 737 MAX than regulators in other countries, and said questions about its relationship with Boeing were fueling public doubts about its independence.

"That you were in bed with those you were supposed to be regulating, and that's why it took so long" to ground the plane, said Rep. Dina Titus (D., Nev.). "That's the impression the public has, and what we need to deal with."

Mr. Elwell acknowledged that globally, "there is a perception, at least, of a crisis in confidence" in the FAA. But he said the agency expects to receive Boeing's formal software fix within about a week and would then try to persuade foreign regulators to endorse it.

Some of the sharpest exchanges between Mr. Elwell and lawmakers centered around whether a suspect stall-prevention feature called MCAS, as well as associated cockpit alerts about potential sensor malfunctions, were deemed "critical" safety items by the agency. After various explanations, the FAA chief said MCAS was certified as critical, even though agency officials deferred much of the analysis to Boeing engineers and other company employees authorized to act on the FAA's behalf. The FAA typically reserves the most important and complex safety issues for assessments led by its own experts.

Regarding the alerts, which help pilots determine the angle of a plane's nose, Mr. Elwell and Earl Lawrence, one of his senior managers, told the panel they were considered advisory and Boeing wasn't obligated to promptly inform the FAA about a software flaw that made them inoperable on most of the MAX fleet. But from the beginning, the plane's manuals included an emergency procedure related to the alerts, and pilots and carriers expected them to operate until Boeing informed them otherwise after the Indonesian accident.

Others took a more sympathetic approach toward both regulators and Boeing, saying the accidents resulted as much from pilot error as flawed design.

"To focus on one single cause fails to see the forest for the trees," said Rep. Sam Graves (R., Mo.), the ranking member of the transportation committee and a pilot. "Failures will occur...The most important safety feature you can have in any aircraft is a well-trained pilot."

Mr. Elwell said he was concerned that morale has suffered at the agency through the crisis, but said the FAA was now focused on evaluating Boeing's proposed fixes before rescinding its order to ground the 737 MAX.

"We're not going to do it until it's safe," he said.

Mr. Elwell reiterated many of the positions he expressed at a Senate Commerce Committee hearing in March, but he indicated a potential shift on one closely watched topic. After weeks of the FAA proposing that no additional simulator training be required for pilots as the planes return to service, Mr. Elwell opened the door making such training mandatory. Once the agency completes a "thorough and robust safety analysis," he said, "we will determine what level of training will be required."

--Doug Cameron contributed to this article.

Write to Andy Pasztor at andy.pasztor@wsj.com and Ted Mann at ted.mann@wsj.com

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Sales 2019 101 B
EBIT 2019 11 272 M
Net income 2019 9 858 M
Debt 2019 5 898 M
Yield 2019 2,25%
P/E ratio 2019 20,81
P/E ratio 2020 14,49
EV / Sales 2019 2,02x
EV / Sales 2020 1,68x
Capitalization 198 B
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