Boeing's move on Max good news for Kiwis with Cover-More travel insurance

One travel insurer says Boeing’s backing to suspend flights of its troubled Max 8 jets means it will pay out to eligible Kiwis who have had their flights disrupted.

While flights suspended by government regulators meant insurers wouldn’t pay out, one company here says Boeing’s stance meant it would.

Cover-More said while most leisure polices excluded claims that come about as a result of government regulation or legislation Boeing’s decision to ground the plane has superseded the Government’s ban.

However, anyone who took insurance after midday on Wednesday when New Zealand’s CAA suspended flights) the problem and possible disruption became a known event wouldn’t be covered.

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”We are considering this event to be outside of the affected airline’s control,” Cover-More has told policy holders.

The reversal is another twist in the fast moving Max 8 story.

Here’s some of what we’ve learned since the crash of an Ethiopian Airways Max 8 plane, just five months after the crash of the same model of aircraft belonging to Lion Air in Indonesia:

Regulators move at very different speeds

China’s Civil Aviation Administration was quick off the mark to suspend use of the planes in its airspace on Monday, citing “zero tolerance” for safety hazards. Ethiopia and Indonesia did the same that day and the move to ground the planes spread on Tuesday, with action in Australia, Singapore, Britain, France, Germany and by the European Aviation Safety Agency — an influential regulator.

New Zealand’s Civil Aviation Authority waited until lunchtime Wednesday (saying it was using time between infrequent Max 8 flights here by Fiji Airways to thoroughly assess information) but it beat Canada and most importantly the US Federal Aviation Administration (FAA) to take action.

A grounded Boeing 737 MAX 8 passenger plane belonging to Norwegian airlines. Photo / AP
A grounded Boeing 737 MAX 8 passenger plane belonging to Norwegian airlines. Photo / AP

The FAA has historically been recognised as holding the gold standard for safety regulation but was under increasing pressure politically, and from commentators who accused it of having overly strong links with Boeing.

The FAA yesterday explained the reason for its delay, with its acting head Daniel Elwell saying enhanced satellite images and new evidence gathered at the Ethiopian crash site led his agency to ground the jets.

There’s an identical look of both disasters

Both happened shortly after takeoff. Initial flight tracking data points to problems with vertical control, a steep dive from a low altitude and in the case of the Ethiopian plane, a report from the pilot saying he was having control problems.

Because of the larger engines on the 737 Max, Boeing installed a computerised system, the Manoeuvering Characteristics Augmentation System (MCAS) to stop the plane’s nose from getting too high and causing a stall.

But faulty data from an angle of attack sensor may have instead caused the system to keep pushing the nose down, possibly leading to the crash of the Lion Air flight. From the outset, experts were pointing to the crashes, which have claimed 346 victims, as having “identical fingerprints” and now the FAA agrees.

Help is on the way for Boeing Max pilots

Boeing has always had a reputation for making a “pilot’s plane”, with a traditional yoke — rather that the Airbus-style side stick — and not pursuing the early emphasis on fly-by-wire systems promoted by the European planemaker. But there is disquiet among some pilots about the Max.

Following the Lion Air crash, new directives were issued to pilots on what to do in the event of MCAS problems.

While a leading pilot in this country says that by following the checklist of steps issued it is relatively straightforward to control the plane, Ethiopian Airways says its pilots were trained in the new measures.

Boeing and the FAA have been under fire for not initially informing pilots about the change introduced to the 737’s flight control system for the Max, in what the New York Times has reported was a move to avoid costly retraining.


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A Boeing 737 MAX 8 operated by Southwest Airlines sits at a gate in Houston. Photo / AP
A Boeing 737 MAX 8 operated by Southwest Airlines sits at a gate in Houston. Photo / AP

But Boeing denies this and training material for the Max followed long established practices which ensured flight crews had all the information to safely operate the planes.

Since the Ethiopian crash, Boeing has released more details of a flight control software “enhancement” it says should be approved by next month.

Once the new software is in, the system will rely on data from more than one sensor to trigger a nose-down command. Also, the system won’t repeatedly push the nose down, and it will reduce the magnitude of the change, said Boeing. There will also be more training for pilots.

This is very bad for Boeing, but not insurmountable

The Boeing 737 Max first flew in 2016 and was the planemaker’s fastest selling model with more than 5000 aircraft on order. The 737 has been around for 50 years and with more than 10,000 in service, has been one of the most successful, reliable and safe aircraft ever built.

Airlines have been clamouring for what was promoted as a new and improved version of the plane with greater fuel savings. Close to $40 billion was wiped off the company’s $360b market capitalisation in the two days following the Ethiopian Airlines crash and Boeing will come under pressure again following the FAA’s action.

Delivery schedules will be disrupted and analysts have raised the possibility of orders being deferred. Lion Air has raised the prospect of switching narrow-body orders to Airbus.

But Boeing has been here before. In 2013, battery fire problems in the more revolutionary Dreamliners forced the grounding of those planes for nearly three months just as they were starting to roll into airline fleets around the world.

The company worked with regulators to come up with a solution and the programme, and the company — the biggest civil aerospace firm in the world — recovered. The difference then was that there were no fatalities.

Boeing was already facing lawsuits following the Lion Air crash and given the link to the latest tragedy, it will face a wave of action and possibly hundreds of millions of dollars in liability.

A worker walks past a Boeing 737 Max 8 airplane at Boeing's assembly plant. Photo / AP
A worker walks past a Boeing 737 Max 8 airplane at Boeing’s assembly plant. Photo / AP

One aviation liability specialist says the economic impact on Boeing could be “absolutely devastating”, while Fitch Ratings says there could be broad ramifications.

While it’s not downgrading the company, it warns that in a ”harsh scenario” where a significant fix is needed and groundings and delivery delays last beyond several months, ratings could be affected.

Boeing says it supports the temporary grounding while reiterating that it believes the aircraft are safe, something that is expected given the potential liability if it said otherwise.

Good luck if you’ve booked through an online travel agent

Traditional bricks and mortar agents can make mistakes, but if you’re left in the lurch you have someone to call. There seems to be an ever-growing variety of potential perils for travellers as they go to more far-flung places.

Because 370 grounded planes is a fraction of the narrow-body fleet and there are only a handful of Max services to New Zealand every week, disruption is not major at this time.

But that’s cold comfort if it happens to you and that’s when an agent is worth their weight in gold — it’s not only flights that may need re-booking, but on-the-ground arrangements.

They can also tell you what sort of plane you’ll be travelling on — a question many travellers have asked this week.