Boeing 737 Max flaw won’t impact business

A Boeing 737 MAX 8.Boeing

• Boeing issued a safety bulletin on Tuesday for airlines operating its new 737 MAX airliner in the wake of the crash of Lion Air Flight JT610.
• The “operations manual bulletin” cautions operators of the 737MAX that erroneous readings from the plane’s angle of attack or AOA sensor can cause the aircraft to enter into a sudden dive.
• Aviation analyst Richard Aboulafia explains that since the bulletin doesn’t reflect poorly on the 737 MAX’s design, Boeing’s business is likely to remain unharmed by the news. 

Boeing issued a safety bulletin on Tuesday for airlines operating its new 737 MAX airliner in the wake of the crash of Lion Air Flight JT610.

The “operations manual bulletin” cautions operators of the 737MAX that erroneous readings from the plane’s angle of attack or AOA sensor can cause the aircraft to enter into a sudden dive, Bloomberg reported. 

“The Indonesian National Transportation Safety Committee has indicated that Lion Air flight 610 experienced erroneous input from one of its AOA (Angle of Attack) sensors,” the Chicago-base planemaker said in a statement. “Whenever appropriate, Boeing, as part of its usual processes, issues bulletins or makes recommendations regarding the operation of its aircraft.”

Boeing’s bulletin advises pilots to use existing procedures to recover from the abrupt dive. 

“On November 6, 2018, Boeing issued an Operations Manual Bulletin (OMB) directing operators to existing flight crew procedures to address circumstances where there is erroneous input from an AOA sensor,” the company’s statement said.

Read More: The Lion Air Flight 610 crash is the worst airliner accident of 2018.

But, according to veteran aviation analyst Richard Aboulafia,  fallout from the tragic crash won’t have much of an effect on Boeing’s business.

“If this is the cause, it’s nothing the system hasn’t dealt with before and it’s extremely discreet and manageable,” Aboulafia said in an interview with Business Insider.

“This is a tragedy but it says absolutely nothing about the design of the plane and its major subsystems.”

Items recovered from the crash of Lion Air Flight JT610.Eddy Purwanto/NurPhoto via Getty ImagesIn addition, the analyst explained that such bulletins are quite common, however, they seldom follow such a tragedy.

Shares of Boeing stock are trading up Wednesday morning.

Aboulafia, the vice president of analysis at consulting firm Teal Group, argues that it’s more important to emphasize how pilots react to failures such as incorrect sensor readings than the failures themselves.

Read More: The 20 safest airlines in the world.

“Bad information can happen and it’s best that the emphasis is on training in the event of contingencies such as these,” Aboulafia said. 

Lion Air Flight JT610 crashed in the Java Sea shortly after taking off Jakarta, Indonesia on October 28. All 189 people on board the flight were killed. Flight JT610 marked the first fatal crash involving Boeing’s next generation 737 MAX aircraft. 

The 737MAX is the fastest-selling plane in Boeing history is the latest version of the company’s 737-family of jets.  Boeing currently has more than 4,500 unfilled orders for the 737 MAX on its books. 

Get the latest Boeing stock price here.