Day: March 12, 2019

The United States told international carriers on Monday that the Boeing 737 Max 8 is airworthy as regulators scrutinize two fatal crashes of the new model of aircraft since October, but said it will mandate forthcoming “design changes” from Boeing by April.

An Ethiopian Airlines 737 Max 8 bound for Nairobi crashed minutes after take-off Sunday, killing all 157 aboard and raising questions about the safety of the new variant of the industry workhorse, one of which also crashed in Indonesia in October, killing 189 people.

In a notice, the Federal Aviation Administration said it planned to require design changes by Boeing no later than April.

Boeing is working to complete “flight control system enhancements, which provide reduced reliance on procedures associated with required pilot memory items,” the FAA said.

The FAA also said Boeing “plans to update training requirements and flight crew manuals to go with the design change” to an automated protection system called the Maneuvering Characteristics Augmentation System or MCAS. The changes also include MCAS activation and angle of attack signal enhancements.

The FAA said in the notice made public that external reports are drawing similarities between the crashes in Ethiopia and Indonesia.

“However, this investigation has just begun and to date we have not been provided data to draw any conclusions or take any actions,” according to the Continued Airworthiness Notification to the International Community for Boeing 737 Max 8 operators.

U.S. Transportation Secretary Elaine Chao told reporters that regulators would not hesitate to act if they find a safety issue.

“If the FAA identifies an issue that affects safety, the department will take immediate and appropriate action,” Chao told reporters. “I want people to be assured that we take these incidents, these accidents very seriously.”

Boeing’s top executive told employees on Monday he was confident in the safety of the U.S. manufacturer’s top-selling 737 Max aircraft.

Reuters and other media outlets have reported that Boeing has for months planned design changes after the Lion Air crash in Indonesia, but the FAA notice is the first public confirmation.

Canada’s transport minister also said he will not hesitate to act once the cause of the crash is known.

FAA chief Dan Elwell on Monday said the notification basically “informs the international community where we are and [gives] sort of … one answer to the whole community.”

Some Boeing jets grounded

Senator Dianne Feinstein, a California Democrat, and Paul Hudson, the president of FlyersRights.org and a member of the FAA Aviation Rulemaking Advisory Committee, on Monday both said the plane should be grounded.

“The FAA’s ‘wait and see’ attitude risks lives as well as the safety reputation of the U.S. aviation industry,” Hudson said in a statement.

The National Transportation Safety Board and the FAA are both at the crash site in Ethiopia, Chao said.

Boeing’s shares fell as much as 10 percent on the prospect that two such crashes in such a short time could reveal flaws in its new plane. Boeing, whose shares closed down 5.3 percent at $400.01 in the heaviest trading trade since July 2013, did not immediately comment Monday on the FAA notification, but said it was sending a team to Ethiopia to aid investigators.

The 737 line, which has flown for more than 50 years, is the world’s best-selling modern passenger aircraft and viewed as one of the industry’s most reliable.

China ordered its airlines to ground the jet, a move followed by Indonesia and Ethiopia. Other airlines, from North America to the Middle East, kept flying the 737 Max 8 on Monday after Boeing said it was safe.

Boeing’s 737 Max is the newest version of a jet that has been a fixture of passenger travel for decades and the cash cow of the world’s largest aircraft maker, competing against Airbus SE’s A320neo family of single-aisle jetliners. The 737 family is considered one of the industry’s most reliable aircraft.

The Max has a bigger and more efficient engine compared to earlier 737 models.

Boeing rolled out the fuel-efficient Max 8 in 2017 as an update to the already redesigned 50-year-old 737, and had delivered 350 Max jets out of the total order tally of 5,011 aircraft by the end of January.
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Venezuela’s state-run oil firm PDVSA has been unable to resume crude exports from its primary port since last week’s massive power outage, essentially crippling the OPEC nation’s principal industry, people familiar with the matter said on Monday.

Power remained patchy in most of the country after a blackout on Thursday that the government of President Nicolas Maduro claimed was a U.S.-backed act of “sabotage” on the country’s principal hydroelectric dam.

His critics insist it is the result of more than a decade of corruption and mismanagement.

Authorities have given few explanations about why the blackout occurred and how long it might take to resolve, spurring fears it could be indefinite.

PDVSA has launched a contingency plan to restore power to the Jose port, according to one source. The state of Anzoategui, where the port is located, has had only intermittent electricity since Friday, the source added.

The port has its own generator, but depends on the grid for 65 percent of its power, a PDVSA source said. The generator is not currently working and efforts are underway to restart it in order to maintain a minimum level of operation.

“It has been totally halted since the blackout. It has affected all of Jose’s oil installations,” another source said, adding that a restart would be costly and require power lines to be replaced.

PDVSA did not immediately reply to a request for comment.

No oil export tankers have left Jose since March 7, according to Refinitiv Eikon data. There were a few shipments between domestic ports on Saturday, when power briefly returned, but another outage that lasted through Sunday halted operations again, according to the data.

The power outage also affected the Puerto la Cruz refinery in Anzoategui, which was already operating at minimum levels.

Rationing

Blackouts are not unusual in Venezuela.

Incidents stemming from problems at the Guri hydroelectric dam have briefly disrupted oil activities at fields that depend on the grid, which are mainly located in western Zulia State, rather than the Orinoco belt. Many fields, refineries and ports generate their own power.

The country’s crude upgraders, which can convert up to 700,000 barrels per day of Orinoco Belt heavy oil into exportable grades, also operated at minimum levels due to the lack of power, the sources said.

But the current outage has been much more widespread and prolonged than those in the past. The status of the generators that PDVSA and its private partners use in upstream activities was unclear, though the PDVSA source said many were “re-circulating” the same product to avoid having to shut down.

The source added that the government had decided to ration what little electricity was available until the grid was back operating at 100 percent, in order to allow the Jose terminal – which includes the port and the Pequiven petrochemical complex – to consume the power it needed from the grid.

“Shipments of crude, sulfur and Pequiven are all paralyzed,” the PDVSA source said.

Even as PDVSA struggles to restart exports, it is having trouble delivering shipments it has already dispatched from its ports due to U.S. sanctions slapped on the company in January in an effort to reduce Venezuela’s government’s cash flow and drive Maduro from power.

The top U.S. buyers of Venezuelan oil are trying to return millions of barrels of crude they need but cannot accept due to the sanctions, leaving the barrels in limbo as demurrage fees accumulate, according to an internal PDVSA document seen by Reuters.

The blackout has also hit domestic fuel supply. PDVSA has said it has activated a contingency plan for its gas stations that do not have their own power generation, but has not provided a general update on domestic fuel supply.
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