MAX - Mer trouble for Boeing - Curt Lewis

Boeing Crisis Deepens as SEC Probes 737 Max Jet Disclosures Skift Take Boeing remains in the hot seat - and the temperature's rising as regulators intensify their scrutiny. The U.S. Securities and Exchange Commission is investigating whether Boeing Co. properly disclosed issues tied to the grounded 737 Max jetliner, according to people familiar with the matter, as regulators intensify their scrutiny of the company following two deadly crashes. Officials in the SEC's enforcement division are examining whether Boeing was adequately forthcoming to shareholders about material problems with the plane, said the people who asked not to be named because the probe isn't public. The agency is also reviewing the aircraft manufacturer's accounting to make sure its financial statements have appropriately reflected potential impacts from the problems, the people said. The SEC inquiry is in its early stages and the regulator's investigations often don't lead to allegations of misconduct. Still, the probe deepens the crisis facing Boeing since a 737 Max crashed in Ethiopia March 10. That wreck, which followed a deadly October crash in the waters off Indonesia, prompted regulators around the world to ground the jet. Spokesmen for Boeing and the SEC declined to comment. Boeing slipped as much as 0.56 percent. The shares rose 1.2 percent to $354.72 as of 3:06 p.m. Boeing has already faced questions about its level of disclosures. It revealed in a May 5 statement that it knew a cockpit alert wasn't working properly for more than a year before the company shared its findings with airlines or the U.S. Federal Aviation Administration. Boeing made the disclosure to customers and the FAA after the October crash, according to the statement. Federal authorities have been conducting a criminal probe of Boeing related to the crashes. While that investigation is looking into the certification process for the new 737 Max planes, the SEC's probe is focused on whether Chicago-based Boeing fulfilled its reporting obligations to investors as a public company. U.S. securities rules require that companies inform shareholders about issues that could have a material impact on their finances, typically by filing statements with the regulator. The problems associated with the 737 Max center around a piece of flight control software that may have contributed to the planes' sudden and deadly descents in Ethiopia and near Indonesia. Both crashes occurred shortly after takeoff. Boeing said earlier this month that the Max had successfully performed more than 200 flights with a software upgrade. Still, U.S. authorities haven't yet tested or approved the fix and it's unclear when the plane might be allowed to fly again. FAA Acting Chief Daniel Elwell said Thursday that a meeting of aviation regulators from around the world to discuss the grounded jetliner was "both comprehensive and constructive." In the aftermath of the global grounding of the 737 Max, the company's main source of profit, Boeing halted share repurchases to preserve cash and suspended its financial forecast for 2019. Boeing also reassigned Michael Luttig, its general counsel and a former federal appeals court judge, to a newly created position to advise Chief Executive Officer Dennis Muilenburg and directors on all legal matters related to the crashes. The company described facing "multiple legal actions" as a result of the tragedies in an April 24 quarterly report filed with the SEC. "We are fully cooperating with all ongoing governmental and regulatory investigations and inquiries relating to the accidents and the 737 Max program," the company said in the filing. "We cannot reasonably estimate a range of loss, if any, that may result."

United Airlines Extends 737 MAX Flight Cancellation Period United Continental Holdings, Inc.'s UAL subsidiary United Airlines has announced the extension of its Boeing 737 MAX flight cancellations through Aug 3, joining fellow industry players - Southwest Airlines Co LUV and American Airlines Group Inc AAL - which had already suspended the 737 MAX flights from their schedules until August. Accordingly, the carrier will make adjustments to its flight schedules to cater to customer needs during the busy summer season. Previously, the Chicago, IL-based airline announced grounding of the same through early July. United Airlines, operating 14 737 MAX jets, will face around 2,400 flight cancellations in June and July due to the expanded flight suspension period. Ever since the 737 MAX aircraft's grounding in mid-March, the carrier had to call off approximately 3,300 flights. These groundings followed two successive fatal air crashes in Indonesia and Ethiopia that resulted in the death of 346 passengers. Per Reuters, the Federal Aviation Administration (FAA) expects the approval of 737 MAX jets' return to service to happen by late June. However, the FAA did not come up with a specific date for the U.S. nod. Meanwhile, Boeing is said to be fixing the software issue, which is believed to have triggered the deadly crashes. The company is anticipated to make a formal submission of its changes along with a proposal for additional pilot training to the FAA, soon for approval.