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Air crash investigator report into Ethiopian Airlines crash – financial implications for Boeing?

Simon de Broise comments on the implications for Boeing in regards to the Ethiopian Airlines flight ET302.


Ethiopian investigators released a statement this morning providing details of their preliminary findings into the crash of the Ethiopian Airlines flight ET302, which crashed shortly after take-off from Addis Ababa. The accident involved Boeing’s new B737 Max 8 aircraft type, which suffered another loss, in similar circumstances, last October when Lion Air flight JT610 crashed into the Java Sea 12 minutes after take-off.

It has been widely reported that both crashes appear to involve Boeing’s new Manoeuvring Characteristics Augmentation System (MCAS), which is designed to prevent stalling. MCAS operates to override the pilot’s controls and bring the nose of the aircraft down if it detects that the aircraft is climbing too steeply.

There has been some speculation about whether pilots have received sufficient training on how to override the MCAS system in the event that it malfunctions. However, the statement from the Ethiopian investigators appears to rule out this possibility in the case of flight ET302. Their preliminary findings are that the crew repeatedly followed the manufacturer’s procedures for overriding the MCAS system, but were nevertheless unable to regain control of the aircraft.

In the light of its preliminary report, the Ethiopian investigators have called for Boeing to conduct a review of the flight control systems on the B737 Max 8 aircraft type.

At the time of writing full details of the preliminary report are still to be released, but clearly this has very serious implications for Boeing, and the many operators and owners of B737 Max 8 aircraft – which appear likely to remain grounded for some time to come.

In the meantime operators are left with aircraft that they are unable to fly and so will be looking to the manufacturer to recover their losses. Boeing has paid (largely undisclosed) compensation to airlines and lessors in the past for groundings, but the scale, and potential duration, of the 737 Max 8 grounding could make things much more expensive, and contentious, this time around.




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Simon de Broise

Senior Associate