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Restoring trust in 737 Max (without Boeing)

The Wall Street Journal’s headline read “Inside the Effort to Fix the Troubled Boeing 737 MAX”. Grabby? Yes, but not really accurate. It should’ve read “Inside Airline Efforts to Restore Trust in the 737 Max.” WSJ’s Scott McCartney had a hands-on simulator demonstration of the coming MCAS updates with a pair of American Airlines pilots. While illustrating the safety features of the new MCAS version, McCartney’s account demonstrates the deep flaws in the design of the original system. This line stood out: “Testing this in the simulator, Capt. Guthrie found he couldn’t move the [trim] wheel unless I let go of the control column I was pulling back to try to keep the nose up.” (Here’s why)

But this wasn’t a Boeing story. It was an American Airlines story. Boeing wasn’t quoted in the story, nor, it appears, were they invited. That absence alone tells you about who airlines want communicating about the 737 Max and its return to service. As one senior U.S. airline executive (not at AA) told The Air Current last month: “We don’t want to spend our political capital on [restoring trust in the Max], but we’re probably going to have to.”

(Not unrelated, American said Sunday it extended its 737 Max schedule cancellation through Sept. 3, until after the U.S. Labor Day holiday.)

Atmosphere Research Group’s Henry Harteveldt explored the hit to Boeing’s reputation and the 737 Max through a detailed survey of 2,000 business and leisure travelers. The stark assessment measured, among other things, the change in attitudes toward Boeing before and after the grounding. Asked to rank the “three words that describe your impression of Boeing”, reliable, professional, dependable became irresponsible, arrogant, unsafe. Airlines want Boeing to be wallpaper.

Separately, but no less relevant, on the eve of the Paris Air Show, Bloomberg’s aviation team reports American is taking a hard look at the A321XLR. It’s 2011 all over again. A struggling Boeing airplane with an expensive problem (it was the 787 then, as it mulled another all new airplane. An Airbus derivative locking up its customer base and a brewing American Airlines order. Back then, that dynamic brought us the 737 Max.

Raytheon & United Technologies Merging

The week began (Sunday afternoon) with official confirmation of a Raytheon and United Technologies “merger of equals.” It’s a huge landscape shift for the aerospace and defense community ahead of the air show. (Here’s the investor slide deck from both companies) The new venture would be called Raytheon Technologies and would be completed after Carrier and Otis are fully spun off from UTC in the first half of 2020. The Boston-area company would become the sum total of Raytheon, (newly created) Collins Aerospace and Pratt & Whitney. The combination would create the third largest aerospace and defense company on the planet behind Boeing and Airbus, jumping past both Lockheed and Northrop and surely the largest concentration of Red Sox fans anywhere in the industry.

Analyst consensus is that it’s good for both companies to link up for counter-cyclical sectors, but there are open questions about the broader benefits. If you’re a supplier to one or both companies, this isn’t welcome news. The defense supply chain is already under extreme pressure, a lesser-told story compared to the commercial industrial chain. Consolidation has meant an even bigger cost squeeze down the chain plus fewer customers to sell your wares. And the President of the United States on CNBC this morning said he wasn’t (paraphrasing here) particularly thrilled with the combination, concerned over a lack of competition between contractors for Pentagon acquisition.

There are few overlapping capabilities between the two companies, and the idea of antitrust has long been centered around a reduction in competition for individual products or services. But conglomerating (generally) also leaves fewer voices, reduces impetus to innovate, increases inertia, and concentrates power. Just ask those in the media industry. The barriers to entry in this business are enormous, but this makes them just that much higher.

Microsoft, Lockheed and the pilot shortage

Rather unexpectedly in the world of desktop flight simulation, Microsoft on Sunday pulled the wraps off a new version of its famous Flight Simulator software. The trailer is stunning. (It also looks like Airbus bought some prime product placement, too.)

Microsoft hasn’t made a new full version of FS since 2006. It disbanded its development team in 2009 and sold the source code to Lockheed Martin. LM grabbed the torch and ran with it, creating Prepar3d, an expansive (and heavily updated) version of the software for aerial and ground scenario training. Microsoft (and subsequently Lockheed), along with Laminar Research’s X-Plane, have spawned an expansive developer industry of higher and higher fidelity add-on aircraft, including painstakingly accurate simulations of commercial aircraft like the 737NG, 777, 747, 717, A320 and Q400. Microsoft is exhibiting in Paris next week, but it appears its new Flight Simulator 2020 won’t be part of its pitch.

From an economic perspective, the aviation industry has yet to fully exploit the low-cost potential of these training platforms as systems simulators. It’s a path to future pilot readiness. It’s also going to be one key in solving a shortage of pilots and those interested in aviation careers. Before a training cadet sits down at a desktop for systems familiarization, in a world with largely decreasing access to general aviation, anything that kindles interest by a younger generation in flying is exceptionally important. It certainly was for this writer some two and a half decades ago.

Also… 

Travel Note
TAC is Paris-bound at the end of this week and will be gearing up for all the madness of the 53rd Salon du Bourget. We’re confident the organizers have solved the logistical challenges of the previous 52 shows. It promises to be a very interesting week. Heading over, too? Let us know what you’re up to.

The annual Uber Elevate Summit kicks off in Washington, D.C. on Tuesday. We’ll have electric vehicle coverage from Paris next week as we dissect what’s real and what’s not in the world of electric flying.

In Case You Missed It 
The Air Current broke the story of the advanced negotiations between Mitsubishi and Bombardier for the CRJ program. TAC’s reporting subsequently prompted both companies to issue statements confirming the talks, which are still rapidly (and very likely) progressing toward a Paris Air Show crescendo.

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Jon Ostrower is Editor-in-chief of The Air Current. Prior to launching TAC in June 2018, Ostrower served as Aviation Editor for CNN Worldwide, guiding the network's global coverage of the business and operations of flying. Ostrower joined CNN in 2016 following four and half years at the Wall Street Journal. Based first in Chicago and then in Washington, D.C. he covered Boeing, aviation safety and the business of global aerospace. Before that, Ostrower was editor of the award-winning FlightBlogger for Flightglobal and Flight International Magazine covering the development of the Boeing 787 Dreamliner and other new aircraft programs from 2007 to 2012. Ostrower, a Boston native, graduated from The George Washington University's School of Media and Public Affairs with a bachelor's degree in Political Communication. He is based in Seattle.

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