​Your flight has ended: Boeing sends the US economy into a nosedive

In the following is our translation of an analysis from RIA Novosti, with commentary by Vince Dhimos. No, Folks, you can’t call it Russian propaganda. All facts are from US and international sources. It’s about how the Boeing lobby managed to send hundreds of people to their death in aircraft that were improperly certified thanks to the efforts of Mitch McConnell, who receives more free money from Boeing than anyone else in Congress, and his wife Elaine Chao, who has the very important title of US Secretary of Transportation and the very important task of overseeing the FAA (Federal Aviation Administration) even though her educational background is in banking and humanities. Would it be gauche of me to remind the reader that a person with no background in aviation would never be considered for such a post in Russia? Just to make sure I was right about that after writing it (I was prepared to delete it), I looked up the credentials of Alexander Neradko, the head of the Russian Federal Air Navigation Service. It turns out he is a graduate of the Moscow Institute of Civil Aviation Engineering with an aviation engineering background. A guy like that would never make it in the US bureaucracy where people with technical and scientific competence are automatically disqualified in favour of well-connected and influential incompetents. Feel safer now, fellow passengers?
 
One of my pet peeves is hypocrisy. The US is so obsessed with alleged “corruption” in Venezuela that it is prepared to invade, killing thousands of Venezuelans to “save” them. The same officials screaming corruption have never given concrete examples of said corruption in Venezuela, which they know little to nothing about, because they’re just winging it in an effort to start another war for oil.
 
Now in US vernacular, lobbying is not considered corruption. By definition, the fact that Elaine Chao’s husband gets tons of free money from Boeing falls under the heading of lobbying, and that can never be conflated with corruption by the US definition. Definitions are definitions. So why complain? Mitch and Elaine are untouchable. In fact, the US Establishment tries people for crimes when they tell the truth about things like this. Ask Julian.
 
But let’s get real for a second and admit that when bureaucrats get paid by Big Business to slough off on their oversight and people die in aircraft that were not properly certified, then their actions are equal to, if not identical to, crimes. High crimes. And this is the very definition of corruption. Hence, lobbying of the kind where big bucks from Big Business pass into the hands of officials and legislators responsible for safety certification, is corruption. If your loved one had died in that 737 MAX in Ethiopia or the one in Indonesia, you’d be vigorously nodding in the affirmative. And while Russia has its government relations specialists, much of the legislation passes through the office of the president, providing a filter. More importantly, the ministries involved in technical matters are run by competent technical people, who cannot be conned in technical matters by industry representatives. In Russia, a non-technical person like Elaine would not be making key decisions about civil aviation safety.
 
And there’s the difference: professionalism and seriousness vs carelessness and incompetence.
 
But there is always a catch for the cheaters, and this case illustrates it. While the bureaucracy can neglect its duty with impunity in the Exceptional USA, the consequences in the real world can’t be ignored, and while the bureaucracy refuses to do its job because it is unaccountable, people everywhere now know that two airliners crashed, and they know why and who is responsible.
 
On March 25, The Telegraph reported that China is buying $35 billion worth of mostly airliners from Airbus. The Ethiopian 737 MAX had crashed 15 days earlier, and the Chinese knew this was the second crash of this plane since November. So who would expect them to buy from Boeing? See, the US officials at the FAA and the Boeing officials liaising with them think they are getting away with something when they cheat on safety. But they forget that the media will always report airliner crashes and investigative reporters will dig up relevant facts about congressional lobbying. They can’t put a lid on that. Result:
 
QUOTE FROM BELOW:
 
“According to estimates by JP Morgan chief economist Michael Feroli, the refusal of airlines to acquire the Boeing 737 MAX will cause more damage to the US economy than the recent 35-day government shutdown.
 
“’If Boeing is forced to stop production of the 737 MAX, GDP growth will slow down by 0.6% on an annualized basis,” Feroli calculated.’”
 
QUOTE FROM BELOW:
 
“Boeing has spent more on congressional lobbying in the last twenty years than any other defence or aviation industry company. In 2018 alone, lobbying costs amounted to $ 15.1 million.
 
The largest recipient of these funds was the Republican "Senate Leadership Fund," created by Senator Mitch McConnell. His wife, Elaine Chao, is Secretary of the Department of Transportation and oversees the FAA.
 
On March 13, Acting Director of the Federal Aviation Administration, Dan Elwell, told reporters that the FAA’s decision regarding the certification of Boeing MAX aircraft was made "as a result of ongoing consultations with Elaine Chao." [relying on her extensive knowledge of humanities and banking]
 
BEGIN TRANSLATION:
 
Your flight is over: Boeing sends the US economy into a nosedive
 
March 28, 2019
 
MOSCOW, March 28 - RIA Novosti, Maxim Rubchenko. Interruptions in the release of the Boeing 737 MAX are capable of reducing US GDP, investment bank JP Morgan warned clients. Airlines are already refusing to purchase the problem aircraft and are demanding compensation for the cancellation of 737 MAX flights. How it all can end for Boeing and the global aviation industry – published by RIA Novosti.
 
Damage assessment
 
According to estimates by JP Morgan chief economist Michael Feroli, the refusal of airlines to acquire the Boeing 737 MAX will cause more damage to the US economy than the recent 35-day government shutdown.
 
“If Boeing is forced to stop production of 737 MAX, GDP growth will slow down by 0.6% on an annualized basis,” Feroli calculated.” For comparison: according to the Congressional Budget Office, the longest government recess in US history ended Jan. 25, cutting GDP by 0.4 percentage points."
 
JP Morgan analysts emphasize that orders for the Boeing 737 MAX account for about a quarter of total aircraft production in the United States. "Even if the release of 737 MAX proceeds, the problems of the airline will still negatively affect the American economy due to the slowdown in investment and the decline in the country’s gross exports," Feroli warns.
 
JP Morgan’s alarming predictions are coming true. This week, Indonesia’s national airline Garuda Indonesia cancelled an order for 49 Boeing 737 MAX 8 airliners worth five billion dollars.
 
“Garuda passengers have lost confidence in this aircraft and do not want to fly it,” explained I Gusti Ngurah Askhara Danadiputra, president of the airline.
 
Experts say that the largest orders for 737 MAX have been placed by Norwegian, SpiceJet, Ryanair, Jet Airways, Lion Air, Flydubai, and Southwest, and they are wondering if the Garuda Indonesia decision will cause a domino effect.
 
This is quite realistic, given that the same Norwegian company expressed its intention to demand compensation from Boeing for the down time due to the global ban on 737 MAX flights.
 
“I see no reason why we would not have to send a bill for unused machines to the manufacturer,” said the Norwegian company president Bjørn Kjos in a video message to Norwegian passengers.
 
Plans to seek compensation from Boeing were also announced by the Polish charter airline Enter Air and Indian SpiceJet. Lion Air, apparently, is waiting for the completion of the official investigation of the October catastrophe to assert a hefty claim against the aircraft manufacturer.
 
According to experts, compensation for forced downtime is at least $250,000 per month per aircraft. And American Airlines alone on Sunday announced the cancellation of 90 flights a day "at least until April 24" because of the ban on Boeing 737 MAX flights.
 
Disaster program
 
Yesterday, Boeing Corporation held a meeting with representatives of the airlines at the plant in Renton. It invited more than 200 pilots and technicians from around the world, as well as officials from the Federal Aviation Administration (FAA) of the United States.
 
Lion Air and Ethiopian Airlines (a Boeing 737 MAX of this airline crashed on March 10 near Addis Ababa) declined to participate in the event. Like Garuda Indonesia, it said that the invitation from Boeing came too late.
 
The aircraft manufacturer introduced customers to a new version of the software for the Boeing 737 MAX, which more smoothly reacts to the nose lift of the plane. In addition, the re-triggering of the angle of attack correction system (MCAS), the failure of which is unanimously considered by experts to be the main cause of the plane crashes in Indonesia on October 29 and in Ethiopia on March 10 (although official investigations have not been completed), is ruled out.
 
As New York Times journalists found out in conversations with the staff of the aviation corporation, Boeing sought to prevent a lag relative to its main competitor Airbus, which launched the 2011 line of Neo models - more economical than the previous aircraft.
 
To maintain leadership, there were two options: either work on a new model from scratch, spending $32 billion on the project, or equip the Boeing 737 with new engines with an increased turbine diameter that promised twenty percent fuel savings. Of course, they chose the latter.
 
However, due to the larger size, it was impossible to install new engines in their place - they had to be carried forward and secured higher. As a result, the alignment was disrupted and the plane began to balk.
 
To correct this defect, Boeing specialists developed a special computer program MCAS, which automatically lowered the nose when it was lifted too much. The system turned out to be quite defective - it tripped even during normal flight mode. And, as reported, it lowered the nose of the aircraft four times more than envisaged. That is, MCAS did not straighten the plane’s position. It sent it into a nosedive.
 
"Not corruption. Lobbying"
 
Even if the new software actually corrects the MCAS distortions, the problems will not end there. The two air crashes attracted a great deal of attention from the public and law enforcement agencies to the working methods of the aircraft manufacturer.
 
First of all, questions arose as to how such a poor system was certified by the FAA. Investigations into this issue are the purview of the Federal Prosecutor's Office, the inspector general of the Ministry of Transport and the congressional commission, and the FBI has even opened a criminal investigation.
 
The first answer is already there: It turns out that the leaders of the Federal Aviation Administration transferred part of the certification process to Boeing Corporation itself. The FAA refers to financial problems: they say, due to lack of funds, there are not enough employees to carry out full-scale certification on their own. However, observers point to something else.
 
As the American Centre for Responsive Politics notes, Boeing has spent more on congressional lobbying in the last twenty years than any other defence or aviation industry company. In 2018 alone, lobbying costs amounted to $ 15.1 million.
 
The largest recipient of these funds was the Republican "Senate Leadership Fund", created by Senator Mitch McConnell. His wife, Elaine Chao, is Secretary of the Ministry of Transport and oversees the FAA.
 
On March 13, Acting Director of the Federal Aviation Administration, Dan Elwell, told reporters that the FAA’s decision regarding the certification of Boeing MAX aircraft was made "as a result of ongoing consultations with Elaine Chao." [My highlighting. Elaine Chao studied banking and humanities, not science or aviation]
 
It is not surprising that the Ethiopian government sent the black box of a crashed Ethiopian Airlines plane to France, although European experts usually investigate Airbus crashes, while American specialists are normally involved in Boeing crashes.
 
Experts and the media have come to an unequivocal conclusion: there is no longer any trust in the United States Federal Aviation Administration in the aviation community. This is confirmed by recent statements by the European Union and Canada regarding their intention to conduct their own examination of all security updates that are being implemented by Boeing.
 
This threatens to significantly delay the return of the Boeing 737 MAX to the sky, and to disrupt all schedules of aircraft deliveries to customers.
 
The competitors win
 
However, the biggest aggravation for American aircraft manufacturers are the Chinese. Last week, during a European tour of Chinese President Xi Jinping in Paris, a contract was signed for the delivery of 300 Airbus aircraft to China.
 
After that, the government-related Internet portal Guncha published a lot of material under the mocking headline "US Dominance collapsed like Boeing."
 
“If Americans are smart enough, they will see that the Boeing incident is not just a plane crash, it is a clear sign that the United States is at risk of losing dominance in the world,” the article notes. “This country has long been at the top in the world, and it continues to indulge in the benefits of this position, refusing to innovate in favour of profit maximization; a predetermined historical replacement will be made that will not be subject to human will: Boeing airplanes will descend from heaven to earth, and the US will inevitably fly off its throne.”
 
The Chinese aviation market is rightfully considered one of the most promising in the world. According to the Boeing forecast, the needs of the PRC [People’s Republic of China] in civilian aircraft for the next 20 years will amount to 7,240 new aircraft with a total value of more than 1.1 trillion dollars. Moreover, the share of narrow-body aircraft like the Boeing 737 will garner three-quarters of the potential demand. But now it will be very difficult for Americans to gain a foothold in this market.
 
Recall that the PRC is developing its own narrow-body aircraft C919, which should compete with the Boeing 737 and Airbus 320 at a more attractive price ($50 million against 70-120 million). The start-up of mass production is planned in 2021, after which the Chinese market for foreign aircraft in this segment will close.
 
But the airlines of other developing countries are watching with increasing interest the new Russian MS-21 as an alternative to the problematic Boeing 737. Last week, the Minister of Industry and Trade Denis Manturov discussed the purchase of these aircraft with representatives of Indonesia. According to him, the MS-21-300 has now successfully passed certification. "Certification in accordance with Russian and European standards and the start of operation will help intensify the promotion of the aircraft in Southeast Asia and other regions," Manturov stressed.
 
END TRANSLATION