Ethiopia says crashed jet’s black boxes show similarities to Lion Air disaster

A woman mourns next to coffins during the burial ceremony of the Ethiopian Airline Flight ET 302 crash victims at the Holy Trinity Cathedral Orthodox church in Addis Ababa, Ethiopia, March 17, 2019. REUTERS/Maheder Haileselassie

 

By Maggie Fick and David Shepardson

ADDIS ABABA/WASHINGTON (Reuters) – The crash of an Ethiopian Airlines plane that killed 157 people had “clear similarities” with October’s Lion Air crash, Ethiopia said on Sunday, shown by initial analysis of the black boxes recovered from the wreckage of the March 10 disaster.

The crash has generated one of the most widely watched and high-stakes inquiries for years, with the latest version of Boeing’s profitable 737 workhorse depending on the outcome.

Both planes were MAX 8s, and both crashed minutes post take-off after pilots reported flight control problems. Concern over the plane’s safety led aviation authorities to ground the model, wiping billions of dollars off Boeing’s market value.

“It was the same case with the Indonesian (Lion Air) one. There were clear similarities between the two crashes so far,” Ethiopian transport ministry spokesman Muse Yiheyis said.

“The data was successfully recovered. Both the American team and our (Ethiopian) team validated it,” he told Reuters, adding that the ministry would provide more information after three or four days.

In Washington, however, U.S. officials told Reuters the FAA and U.S. National Transportation Safety Board (NTSB) had not yet validated the data.

Boeing’s safety analysis of a new flight control system known as MCAS on MAX jets had several crucial flaws, one of which was that it understated the power of the system, the Seattle Times said on Sunday.

The FAA also did not delve in detailed inquiries and followed a standard certification process on the MAX, the paper said, citing an FAA spokesman.

The FAA declined to comment on the report but referred to previous statements about the certification process. It has said the process followed FAA’s standard process.

Citing people familiar with the inquiry, the Wall Street Journal said Department of Transportation officials are scrutinizing the FAA’s approval of MAX jets and a Washington, D.C. grand jury issued a subpoena to at least one person involved in the MAX’s development.

The subpoena dated March 11 – a day after the Ethiopian Airlines crash – listed as a contact a prosecutor from the Justice Department’s (DoJ) criminal division and sought documents to be handed over later this month, the paper said.

It was not immediately clear whether the DoJ subpoena was related to the DoT’s inquiry, which focuses on MCAS, implicated in the Lion Air crash that killed 189 people, the WSJ added.

Boeing and the FAA declined to comment on the WSJ report.

Two government officials briefed on the matter told Reuters it would not be surprising for the Transportation Department to investigate a major safety issue, but could not immediately confirm the report.

SAFETY ANALYSIS

An official told Reuters that when investigators – after reviewing black box data from the Ethiopian Airlines crash – return to Addis Ababa to conduct interpretive work, the NTSB and FAA will assist in verification and validation of the data.

A second source said little information had been circulated between parties about the contents of data and voice recordings.

It was not clear how many of the roughly 1,800 parameters of flight data and two hours of cockpit recordings, spanning the doomed six-minute flight and earlier trips, had been taken into account in the preliminary Ethiopian analysis.

International rules require a preliminary report on the crash to be released within 30 days.

Previous air crash reports show that in such high-profile cases there can be disagreements among parties about the cause.

In Paris, France’s BEA air accident investigation agency said data from the jet’s cockpit voice recorder had been successfully downloaded. The French agency said on Twitter it had not listened to the audio files and the data had been transferred to Ethiopian investigators.

In Addis Ababa, a source who has listened to the air traffic control recording of the plane’s communications said flight 302 had an unusually high speed after take-off before it reported problems and asked permission to climb quickly.

Last Monday, Boeing, shares of which have fallen 10 percent in the week since the crash, said it would deploy a software upgrade to the 737 MAX 8, hours after the FAA said it would mandate “design changes” in the aircraft by April.

Boeing was finalizing the software change and a training revision and would evaluate new information as it became available, Chief Executive Dennis Muilenburg said in a statement on Sunday, after the Ethiopian transport ministry’s comments.

A Boeing spokesman said the 737 MAX was certified in line with identical FAA requirements and processes that governed certification of all previous new airplanes and derivatives. The spokesman said the FAA concluded that MCAS on 737 MAX met all certification and regulatory requirements.

(Graphic – The grounded 737 Max fleet: https://tmsnrt.rs/2u5sZYI)

(Graphic – Ethiopian Airlines crash: https://tmsnrt.rs/2Hn6V4k)

(Additional reporting Gaurika Juneja, Tim Hepher, Tracy Rucinski; Writing by Sayantani Ghosh; Editing by William Maclean and Clarence Fernandez)

The crash has generated one of the most widely watched and high-stakes inquiries for years, with the latest version of Boeing’s profitable 737 workhorse depending on the outcome.

Both planes were MAX 8s, and both crashed minutes post take-off after pilots reported flight control problems. Concern over the plane’s safety led aviation authorities to ground the model, wiping billions of dollars off Boeing’s market value.

“It was the same case with the Indonesian (Lion Air) one. There were clear similarities between the two crashes so far,” Ethiopian transport ministry spokesman Muse Yiheyis said.

“The data was successfully recovered. Both the American team and our (Ethiopian) team validated it,” he told Reuters, adding that the ministry would provide more information after three or four days.

In Washington, however, U.S. officials told Reuters the FAA and U.S. National Transportation Safety Board (NTSB) had not yet validated the data.

Boeing’s safety analysis of a new flight control system known as MCAS on MAX jets had several crucial flaws, one of which was that it understated the power of the system, the Seattle Times said on Sunday.

The FAA also did not delve in detailed inquiries and followed a standard certification process on the MAX, the paper said, citing an FAA spokesman.

The FAA declined to comment on the report but referred to previous statements about the certification process. It has said the process followed FAA’s standard process.

Citing people familiar with the inquiry, the Wall Street Journal said Department of Transportation officials are scrutinizing the FAA’s approval of MAX jets and a Washington, D.C. grand jury issued a subpoena to at least one person involved in the MAX’s development.

The subpoena dated March 11 – a day after the Ethiopian Airlines crash – listed as a contact a prosecutor from the Justice Department’s (DoJ) criminal division and sought documents to be handed over later this month, the paper said.

It was not immediately clear whether the DoJ subpoena was related to the DoT’s inquiry, which focuses on MCAS, implicated in the Lion Air crash that killed 189 people, the WSJ added.

Boeing and the FAA declined to comment on the WSJ report.

Two government officials briefed on the matter told Reuters it would not be surprising for the Transportation Department to investigate a major safety issue, but could not immediately confirm the report.

SAFETY ANALYSIS

An official told Reuters that when investigators – after reviewing black box data from the Ethiopian Airlines crash – return to Addis Ababa to conduct interpretive work, the NTSB and FAA will assist in verification and validation of the data.

A second source said little information had been circulated between parties about the contents of data and voice recordings.

It was not clear how many of the roughly 1,800 parameters of flight data and two hours of cockpit recordings, spanning the doomed six-minute flight and earlier trips, had been taken into account in the preliminary Ethiopian analysis.

International rules require a preliminary report on the crash to be released within 30 days.

Previous air crash reports show that in such high-profile cases there can be disagreements among parties about the cause.

In Paris, France’s BEA air accident investigation agency said data from the jet’s cockpit voice recorder had been successfully downloaded. The French agency said on Twitter it had not listened to the audio files and the data had been transferred to Ethiopian investigators.

In Addis Ababa, a source who has listened to the air traffic control recording of the plane’s communications said flight 302 had an unusually high speed after take-off before it reported problems and asked permission to climb quickly.

Last Monday, Boeing, shares of which have fallen 10 percent in the week since the crash, said it would deploy a software upgrade to the 737 MAX 8, hours after the FAA said it would mandate “design changes” in the aircraft by April.

Boeing was finalizing the software change and a training revision and would evaluate new information as it became available, Chief Executive Dennis Muilenburg said in a statement on Sunday, after the Ethiopian transport ministry’s comments.

A Boeing spokesman said the 737 MAX was certified in line with identical FAA requirements and processes that governed certification of all previous new airplanes and derivatives. The spokesman said the FAA concluded that MCAS on 737 MAX met all certification and regulatory requirements.

(Graphic – The grounded 737 Max fleet: https://tmsnrt.rs/2u5sZYI)

(Graphic – Ethiopian Airlines crash: https://tmsnrt.rs/2Hn6V4k)

(Additional reporting Gaurika Juneja, Tim Hepher, Tracy Rucinski; Writing by Sayantani Ghosh; Editing by William Maclean and Clarence Fernandez)

Markets may be signaling rising recession risk: Fed study

A cyclist passes the Federal Reserve building in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Watti

By Ann Saphir

SAN FRANCISCO (Reuters) – A narrowing gap between short-term and long-term borrowing costs could be signaling heightened risk of a U.S. recession, researchers at the San Francisco Federal Reserve Bank said in a study published on Monday.

The research relies on an in-depth analysis of the gap between the yield on three-month and 10-year U.S. Treasury securities, a gap that like other measures of short-to-long-term rates has narrowed in recent months.

Several Fed officials have cited this flattening yield curve as a reason to stop raising interest rates, since historically each time it inverts, with short-term rates rising above long-term rates, a recession follows.

The study, published in the San Francisco Fed’s latest Economic Letter, bolsters that view.

“In light of the evidence on its predictive power for recessions, the recent evolution of the yield curve suggests that recession risk might be rising,” wrote San Francisco Fed research advisers Michael Bauer and Thomas Mertens.

Still, they noted, “the flattening yield curve provides no sign of an impending recession” because long-term rates, though falling relative to short-term rates, remain above them.

The yield on the 10-year Treasury note on Monday was about three-quarters of a percentage point higher than the yield on the three-month note.

That is a “comfortable” distance from actual inversion, which is the true signal of a recession, they wrote.

The Fed is expected to continue raising rates for at least the next couple of quarters, though markets expect it to raise rates just once next year, while Fed officials expect to raise them three times.

Other researchers both inside and outside the Fed have cited the build-up of bonds at the Fed and other central banks since the global financial crisis as one reason to doubt the signaling power of an inverted yield curve. That is because the large bond-holdings may be pushing down long-term rates.

Similarly, investor preference for U.S. debt, seen as low-risk, may also be driving down yields on long-term Treasuries and distorting the yield curve, making it less reliable as an indicator of a coming recession.

A recent paper from researchers at the Washington-based Fed board looked at a different part of the yield curve and found little cause for concern.

The debate is likely to continue, as rarely does one study settle any matter in macroeconomics.

(Reporting by Ann Saphir; Editing by Dan Grebler)