In our prior two Supply Chain Matters blog updates regarding the ongoing Boeing 737 MAX global aircraft groundings, we provided our readers with two observations.
One was that with each passing month, the cumulative risks increase, as well as pressures for even faster production and productivity output increases for both the 737 and the 787 Dreamliner aircraft end-to-end supply chain networks. Essentially, lost profits, cash flow and added costs have to be made-up.
Our last update highlighted an exclusive Reuters published report indicating that Boeing was grappling with orchestrating a significant ramp-up of 737 MAX production shortly after clearance to fly is granted by global-wide regulators. Citing informed sources, this report indicated that at the end of July, Boeing informed more than 100 suppliers that a new monthly production ramp-up schedule would go into effect dependent upon regulators’ approval of the MAX return to service. The one sentence in the Reuters report that really caught our attention was:
“Boeing and its suppliers are now caught between two conflicting pressures: preparing to get back on the upward path as soon as the plane is flying but also ratcheting downwards if regulators stall and the grounding continues for longer than expected.”
There is now a report that points to the latter scenario, one that points to a longer grounding than Boeing anticipates.
The Seattle Times reported this week that the European Union Aviation Safety Agency (EASA), which has conducted its own independent review of the grounding: “is not satisfied with a key detail of Boeing’s fix to the jet.”
Further reported was that the agency is demanding that Boeing demonstrate in flight tests that would indicate the stability of the aircraft during extreme maneuvers, not only with the newly updated flight-control system but additionally, with the MCAS system turned-off. In essence, the European regulator seeks proof that aircraft stability will include high-speed turn and stall maneuvers with the MCAS flight system turned off.
This report also indicates that EASA appears to be calling for more stringent requirements than the U.S. counterpart, FAA, which represents a noted departure from industry practices that relied on the U.S. regulator to incorporate global agency needs and requirements in any return to flight certification.
The implication is that FAA approval, if granted, would apply only to U.S. airline customers flying domestically. European carriers would have to wait for EASA final clearance. Additionally noted: “And, it will put Boeing in a very awkward position if the FAA says the MAX is safe to fly while others hold back approval.”
Recall that the FAA was the last global regulator to call for the aircraft’s grounding after evidence came forth from the two fatal aircraft crashes in Indonesia and Ethiopia.
The FAA declined to provide comment to the Seattle Times regarding the EASA declaration.
Implication to the 737 Supply Network
We can only speculate that if this new information regarding European, or even other global regulator calls for additional flight testing, that the 737 MAX return to global operational service will likely slip into 2020, depending how quickly and thoroughly Boeing can respond to the reported added flight-testing requirements.
As noted in the Reuters report, this may not be good news for the 737 MAX supplier ecosystem since it would imply a potential further temporary reduction or suspension of production until this aircraft can be cleared for global-wide flying certification.
That is obviously not an ideal scenario for suppliers and for Boeing’s own manufacturing teams.
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