Boeing's Max jet lobbying part of Transportation Department probe

By BoeingFOXBusiness

Boeing shares spike after unveiling 737 Max fixes

Money Map Press chief technical strategist D.R. Barton discusses how Boeing’s stock jumped after the company unveiled ways to fix the issues involving its 737 Max jets.

The Department of Transportation will probe whether Boeing used improper influence to coerce the Federal Aviation Administration to swiftly approve the firm's Max jet, the agency's inspector general told a Senate panel on Wednesday.

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Media reports have indicated the Chicago-based manufacturer -- engaged in a intense battle with rival Airbus -- employed an aggressive lobbying operation to accelerate the certification process for the update to its most popular plane.

When asked about the efforts, Inspector General Calvin Scovel said he did not "have information yet" to answer the question. Scovel is leading a probe of the federal approval for the Max fleet requested by Secretary Elaine Chao.

"The point of the first part of our ongoing audits will be the certification process that FAA and Boeing employed to approve the 737 Boeing Max," he told the Senate Commerce Committee.

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Boeing's spending on advocacy efforts in Washington D.C. -- $15.1 million in 2018, according to federal filings -- is one of the largest for any individual company.

In its approval system, the FAA relies on the industry to develop designs and specifications that comply with federal regulations. The agency then decides whether the applicant "has shown that the overall design meets safety standards," FAA acting chief Daniel Elwell told a panel in an opening statement, later defending the process amid scrutiny from lawmakers on both sides of the aisle.

"The FAA determines what aspects of the delegation or what aspects of the certification can be delegated [to industry] and usually those are normal, well-known legacy-type systems," he said.

As the agency conducts the review, it then gradually allows the manufacturer to "take on more of the delegated authority under very strict review by the FAA," according to Elwell.

Alongside the approval process, Elwell also faced questions over the FAA's delay in grounding the Max fleet after the Ethiopian Air crash -- which occured a day after countries including China, the U.K. and others took action.

Elwell said he regularly briefed Chao and President Trump prior to the decision, but declined to discuss private conversations with the White House. His refusal to disclose details of those talks prompted backlash from committee members, including Sen. Richard Blumenthal [D-CT].

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Boeing on Wednesday demoed its pending software update for the Max jet for 200 pilots and industry officials. Shares rose as those developments were released.

"We’ll be spending time with them to explain the updates that we’re making to the 737 MAX, to get their input and to earn their trust," Vice President Mike Sinnett said at the event.

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The update -- which will address the so-called "angle of attack" sensor, the system that tracks incline at takeoff to prevent stalling and is thought to be the underlying cause for the Lion Air and Ethiopian Airlines crash -- is expected to soon be rolled out.

"We’ve been working diligently and in close cooperation with the FAA on the software update. We are taking a comprehensive and careful approach to design, develop and test the software that will ultimately lead to certification," a Boeing spokeswoman said.

The company is paying for the development of the software and subsequent pilot training after facing criticism over its prior practice of charging for some safety upgrades.