Several hours after Ethopian investigators found that the crash of Ethiopian Airlines Flight 302 was not the result of pilot error (hence, it was the result of Boeing error), and demanded a full review of the Boeing 737 Max flight control system, just after 3pm, Boeing CEO Dennis Muilenburg took to social media where in what passed as an attempt at a a “heartfelt” apology, the CEO of the most important, for the Dow Jones, company said that Boeing was “sorry for the lives lost” and essentially admitted that it was the company’s software that was responsible for the crashes, saying that “with the release of the preliminary report of Ethiopian Airlines Flight 302accident investigation, it’s apparent that in both flight the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information.”
Here are Muilenburg’s prepared remarks:
We at Boeing are sorry for the lives lost in the Boeing 737 MAX accidents. These tragedies continue to weigh heavily on our hearts and minds and we extend our sympathies to the loved ones of the passengers and crew on board Liion Air Flight 610 and Ethiopian Airlines Flight 302. All of us feel the immense gravity of these events across our company and recognize the devastation to the families and friends of the loved one who perished. The full details of what happened in these two accidents will be issued by the government authorities in the final reports.
But with the release of the preliminary report of Ethiopian Airlines Flight 302accident investigation, it’s apparent that in both flight the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information.
The history of our industry shows most accident are caused by a chain of events. This again is the case here, and we know we can break one of those chain links in these two accidents. As pilots have told us, erroneous activation of the MCAS function can add to what is already a high workload environment. It’s our responsibility to eliminate this risk. We own it, and we know how to do it.
The full video apology is below.
We at Boeing are sorry for the lives lost in the recent 737 accidents and are relentlessly focused on safety to ensure tragedies like this never happen again.
— Dennis A. Muilenburg (@BoeingCEO) April 4, 2019
So with the company essentially inviting an avalanche of lawsuits, why is Boeing surging higher? Well, here is Bloomberg’s explanation:
Hopes that the drawn-out China trade negotiations are entering the home stretch are helping Boeing Co. shares shrug off the latest developments emanating from the Ethiopia crash that, while concerning, may only serve to provide incremental new information.
This was perplexing because in the same article, Bloomberg Intelligence analyst Matthew Geudtner was quoted saying that the “grounding of the 737 Max will slow deliveries, prompting inventories to rise, and may curb $3.2 billion in free cash flow this year. Lawsuits and reimbursements, which could add up to $1.9 billion for a hypothetical six-month delivery pause, could become potential calls on Boeing’s $8.6 billion of cash.”
None of that however mattered to algos, or markets, and Boeing closed sharply higher, clearly eager to put Boeing’s recent deadly accident in the rearview mirror. And why not: after all the company has now apologized
for risking human lives just to boost its bottom line and all is forgiven.