Boeing faces possible new FAA enforcement action over alleged regulatory lapses

737 MAX cleared to fly again next week, as regulators step up pressure over potential violations affecting other models

U.S. aviation authorities are considering new safety-related penalties or other enforcement action against Boeing Co., according to a person briefed on the details, as they prepare to allow the plane maker’s beleaguered 737 MAX fleet back in the air as soon as the middle of next week.

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The Federal Aviation Administration’s move to lift the MAX fleet’s grounding, expected to be promptly followed by regulators in Canada, Brazil, Europe and elsewhere, follows extensive delays and public debate that roiled the industry and plunged Boeing into its biggest financial crisis prior to the pandemic.

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Barring last-minute changes, the decision is to be announced Nov. 18, according to government and industry officials, capping a historical reassessment of pilot reaction times regarding aircraft designs. Widespread MAX operations aren’t expected to start until early next year, following required maintenance and pilot-training measures.

In a statement Monday, the FAA indicated it was in the final stages of signing off on the package of safety fixes to the MAX fleet. The agency has said it set no firm timeline for approving the MAX for passenger flights.

Boeing declined to comment. In the wake of the MAX crashes, Boeing has retooled its internal safety-monitoring systems.

Boeing’s efforts to resolve numerous problems associated with a hazardous flight-control system on the MAX have taken nearly two years, and started even before regulators grounded the fleet in March 2019. Misfires of that automated feature, called MCAS, took 346 lives in two crashes over less than five months.

Separately, according to the person briefed on the details, the agency has alerted Boeing that alleged quality-control lapses on assembly lines and undue management pressure on engineers certifying safety systems could amount to violations of a 2015 settlement of systemic safety oversight problems. The FAA is examining issues affecting several aircraft models, this official said, including production of the 787 Dreamliner.

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The five-year-old agreement was a response to persistent safety shortcomings identified by the FAA among some of Boeing’s engineers and inside its airliner factories. The company agreed to pay $12 million in penalties, but the FAA reserved the right to seek up to an additional $24 million from the company if it was determined to be out of compliance by the end of 2020. Under the original agreement, Boeing was obligated to submit its final compliance report to the FAA last month.

Potential enforcement action focuses on issues previously identified by the FAA. Those include manufacturing lapses affecting the plane maker’s widebody 787 Dreamliner aircraft, debris left inside MAX fuel tanks and the company’s failure to promptly turn over chat messages that suggested a former senior 737 pilot may have unintentionally misled the agency.

The 2015 agreement spelled out procedures to ensure Boeing assembly-line workers strictly followed production rules and engineers provided the FAA with regular audits demonstrating compliance with safety and design standards.

Agency chief Steve Dickson has repeatedly said all enforcement options are on the table, without elaborating. But in recent weeks, according to the person briefed on the details, the FAA has presented specific concerns to Boeing and formally alerted the company that the agency is weighing whether terms of the agreement have been breached. It wasn’t immediately clear whether the FAA would seek to impose fines or other remedies available under the 2015 agreement, or impose a new compliance plan.

Boeing executives have said the company was focused on preventing a repeat of such tragedies. “Not a day goes by that we don’t remember, reflect, rededicate ourselves to ensuring accidents like these never happen again,” Chief Executive David Calhoun told analysts last month.

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The FAA’s leadership is wrapping up plans to alert lawmakers, airlines and foreign regulators in anticipation of the Nov. 18 announcement, according to U.S. officials briefed on the plans. The schedule could slip, the officials said, but technical details have been locked in while agency officials and lawyers are in the final stages of drafting language and responding to public comments.

Mr. Dickson, a former military and airline pilot, flew the aircraft earlier this year so he could personally vouch for the aircraft. In a statement Monday, Mr. Dickson said the overall process was “near the finish line” but reiterated he won’t act until all outstanding safety issues have been resolved.

Boeing has revamped its engineering and safety processes, as part of a push to reduce cost and schedule pressures and give senior leaders greater visibility of emerging problems.

Mr. Dickson, however, has said the FAA will ratchet up oversight until the results of those initiatives to change corporate culture are evident. “We’ll be working with them on those issues,” he said after his test flight, adding “it’s something we are watching very closely.”

Despite the adjustments, bigger changes have not materialized. The FAA has made some limited adjustments to its aircraft-certification processes, but no big personnel or structural changes. Congress hasn’t passed any major legislative changes, though government and industry officials have said they see a slim chance a Democrat-drafted  House bill still could get through the Republican-controlled Senate during the lame-duck session.

Fallout from the crisis hasn’t abated. Boeing said Tuesday that more than 1,000 jetliner orders have been canceled this year because of the pandemic-driven travel slump and delays in returning the 737 MAX to service.

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