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FAA Has 'Credibility Problem' Over Boeing 737 MAX Safety Approval, House Panel Chairman Says -- 2nd Update

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05/15/2019 | 01:20pm 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 Department of Transportation, 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."

Mr. Elwell also criticized Boeing as being slow to notify the FAA about certain cockpit alerts that were supposed to be standard on MAX jets, but didn't work on much of the fleet because of a software error. The alerts are intended to warn pilots about errant data from sensors that measure the angle of a plane's nose.

"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 the reason 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."

Others took a more sympathetic approach toward both regulators and Boeing, saying the accidents were as much a result of pilot error as of 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 that 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.

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

Stocks mentioned in the article
ChangeLast1st jan.
BOEING COMPANY (THE) 0.00% 330 Delayed Quote.3.18%
BOEING COMPANY (THE) 0.45% 356.01 Delayed Quote.10.39%
RANDOM LENGTH LUMBER?FUTURES (LBS) - CMG (ELECTRONIC)/C1 -0.08% 359 End-of-day quote.8.06%
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Financials (USD)
Sales 2019 85 484 M
EBIT 2019 4 136 M
Net income 2019 3 378 M
Debt 2019 11 625 M
Yield 2019 2,24%
P/E ratio 2019 61,0x
P/E ratio 2020 14,7x
EV / Sales2019 2,48x
EV / Sales2020 1,69x
Capitalization 200 B
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Number of Analysts 24
Average target price 415,05  $
Last Close Price 356,01  $
Spread / Highest target 40,4%
Spread / Average Target 16,6%
Spread / Lowest Target -18,5%
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NameTitle
Dennis A. Muilenburg Chairman, President & Chief Executive Officer
Jenette E. Ramos Senior Vice President-Supply Chain & Operations
Gregory D. Smith CFO, EVP-Corporate Development & Strategy
Theodore Colbert Chief Information Officer & SVP-Data Analytics
Gregory L. Hyslop CTO, Senior VP-Engineering, Test & Technology
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