Boeing shareholders probably breathed a sigh of relief Thursday afternoon when the Oracle of Omaha himself declared that, although Boeing has “a lot of work to do, very promptly,” the airline industry as a whole is still “unbelievably safe.” Because Warren Buffett’s tentative vote of confidence in Boeing was the best news the company had all day.
Shortly after Boeing unveiled the fixes to the controversial MCAS anti-stall software on its 737 MAX 8 jets – software that is suspected of having contributed to two plane crashes that left more than 350 people dead – the family of a passenger who died on Ethiopian Airlines flight ET302 has filed the first lawsuit against the aerospace company in a US federal court.
According to Reuters, the suit was filed by the family of Jackson Musoni, a citizen of Rwanda. He was one of 157 people who died during the March 10 crash. In a further bad look for the company, the lawsuit alleges that MCAS’s design was defective. That comes as Boeing has reconfigured the software to stop it from mistakenly triggering the nose-down behavior that is believed to have contributed to the two crashes. The company’s shares traded slightly higher on Thursday.
Boeing is still dealing with a lawsuit filed by the family of a man who was killed aboard the Lion Air crash, which took place on Oct. 29 when a 737 MAX owned by Lion Air plunged into the Java Sea just minutes after takeoff. The suit alleges that the 737 was “unreasonably dangerous” and is calling for what would be an embarrassing jury trial in Chicago, per Reuters.
But the lawsuit was the only disappointing headline for Boeing traders to digest. The WTO ruled on Thursday that the US had failed to comply with an earlier ruling calling for it to end illegal subsidies for Boeing, setting the stage for potentially damaging retaliatory damage from the EU, according to WSJ.
Meanwhile, the backlash over revelations that Boeing charged extra for certain safety features is intensifying after the acting head of the FAA and the secretary of the Department of Transportation sat for Congressional hearings. Sen. Dianne Feinstein and a group of senators publicized a letter they sent to Boeing demanding that all “optional” safety features be included in every plane sold.
Safety features on jets that fly hundreds of passengers should never be sold as a la carte add-ons. Boeing should include all safety-critical systems necessary for safe operation as part of the standard cost to the airlines. pic.twitter.com/0RgySKIesG
— Sen Dianne Feinstein (@SenFeinstein) March 28, 2019
That’s because the EU’s retaliation can be commensurate with the damage done to France’s Airbus, Boeing’s biggest rival, not to the benefit received by Boeing. Specifically, the WTO ruled that Washington State tax breaks for Boeing’s Renton factory, as well as a federal export-import tax break.
The WTO ruliing comes at a particularly sensitive time for US-EU trade relations, as Trump threatens to impose damaging tariffs on foreign cars, and the EU has refused the Trump administration’s demands to open its markets to more US agricultural goods.
Presumably, the last thing Boeing needs now is to become the center of another acrimonious international trade dispute.
via ZeroHedge News https://ift.tt/2HWjX8E Tyler Durden