WASHINGTON • The software fix for Boeing's models may end up costing the Chicago-based aircraft manufacturer billions of dollars as it redesigns a computerised flight-control system on hundreds of jets sitting idle around the world.
The fixes alone for the revamped version of Boeing's single-aisle workhorse 737 could cost the company around US$500 million (S$670 million) if everything is resolved in six to eight weeks, according to Canaccord Genuity analyst Ken Herbert.
Delivery delays and reimbursements to airlines for flight disruptions would add another US$2 billion in lost cash flow each month the planes are kept on the ground by regulators, Mr Herbert said. Boeing could make much of that money back if deliveries resume promptly.
But that is the best-case scenario, Mr Herbert said. If it turns out the investigation into Ethiopian Airlines crash on March 10 identifies new issues or complications, he said, the costs of fixing the software "could be substantially higher".
Boeing last week outlined multiple changes it expected to make within weeks as a result of an October crash near Indonesia that raised concerns about an automated safety system on the plane. The urgency of those upgrades heightened significantly last Wednesday when the US joined other nations in grounding the plane after it appeared that similar issues may have played a role in the crash in Ethiopia.
If the change is sufficient, this setback "should have very little long-term impact on the success of the Max", Mr Herbert said.
Boeing, in consultation with the US Federal Aviation Administration (FAA), will add redundancy and other limits to the Max's Manoeuvring Characteristics Augmentation System (MCAS) so that it is less likely to command the repeated nose-dives preceding the Lion Air crash last Oct 29 that killed 189 people near Jakarta, the company said in a statement last Monday.
Reuters, citing sources familiar with the matter, reported that Boeing plans to release the upgraded software for its 737 Max in a week to 10 days.
While the FAA and other regulators around the world have not said precisely what it will take to get the plane back into the air, one critical thing will be to restore confidence in the MCAS.
In the Lion Air crash, a faulty sensor at the nose of the plane sent an erroneous warning that the plane's nose was pointed too high and could plummet out of control because of a loss of lift on the wings, known as an aerodynamic stall. No such danger actually existed.
Because the Max, with its bigger engines, was more prone to a stall, Boeing devised the MCAS as an additional safety measure.
If it sensed a stall in those limited conditions, it did not wait for the pilots to act. It commanded the so-called trim system to push down the nose.
A preliminary flight track produced by satellites found that the Ethiopian plane had made the same series of up-and-down movements during its six-minute flight, according to the FAA.
Additionally, a screw-like device that raises and lowers the plane's nose was found in the wreckage in a position indicating the plane was set to dive, according to a person familiar with the investigation.
Boeing's package of fixes attempts to prevent that from happening again. The system also will not act repeatedly if pilots overcome it, according to the company.
In addition, Boeing and the FAA plan to mandate changes in airline flight manuals and to give pilots additional training in how to overcome a malfunction.