Boeing and Trump are clearly in conflict of interest, according to experts from aviation

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The delay by the Federal Aviation Administration in the grounding of the Boeing 737 Max 8 aircraft is linked to the close commercial relationship between the aircraft manufacturer and the US government, aviation experts told Yahoo. Finance.

"First and foremost, the FAA in the United States has a dual function," said aviation lawyer Arthur Rosenberg at Yahoo Finance's The First Trade. "He certifies aircraft, he is responsible for flight safety and also has an economic interest in air transport."

Meanwhile, "Boeing, on the other hand, is only an economic interest," continued Rosenberg. "I think the economy was playing in the shadows – a loss of revenue for Boeing if she had to solve this problem."

Rosenberg pointed to a note from Jefferies that estimates early estimates at around $ 5 billion, or about 5% of its revenue. Melius Research estimates this estimate at about $ 1 billion in ongoing costs and several billion in "calendar-related" costs.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" There is a conflict of interest – and was former FAA Inspector of Operations, Bill McNease told Yahoo finance. "In 2007, I testified before a congressional committee about the conflict between the FAA and different operators." "Data-reactid =" 19 ">" There is a conflict of interest – and this has been the case " said Bill McNease, former FAA operations inspector. told Yahoo finance. "In 2007, I testified before a congressional committee about the conflict between the FAA and different operators."

US President Donald Trump, left, is introduced by Boeing General Manager Dennis Muilenburg at the first edition of the 787-10 Dreamliner at the Boeing, South Carolina facility on February 17, 2017 in North Charleston, South Carolina. (Photo: Sean Rayford / Getty Images)

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In addition, an airplane enthusiast and former owner of the late former Trump Shuttle is president. And President Trump has a personal relationship with Boeing General Manager Dennis Muilenburg: Muilenburg donated $ 1 million to Trump's inaugural committee, visited Trump's Mar Trag Club in December 2016 and promised to build new Air Force One aircraft for less than $ 4 billion. request.

"I hope it will be for a short time," Trump told reporters Thursday during a questioning about the grounding. "The most important thing is that they have to find out what it is. I'm not sure that they know, but I thought we had to do it, we had to take precautions. "

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The FAA grounded every Boeing 737 Max 8 on Wednesday, a decision made after increased pressure on the agency after airlines around the world did the same.

Rosenberg told Boeing that there was another important incentive to pressure the FAA to not block planes – Boeing's fear of losing market share.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" Foreign carriers have less interest, they are less attached, " said Rosenberg, referring to other aviation authorities failing the Boeing aircraft around the world. "They were competitors abroad." "Data-reactid =" 45 ">" Foreign carriers have less interest, they are less connected, " said Rosenberg, referring to other aviation authorities failing the Boeing aircraft around the world. "They were competitors abroad."

A glance at Boeing 737 MAX 8 aircraft by country. (Graph: Reuters)

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Rosenberg explained that the main European competitor, Airbus, had its own version of the 737 – the A320 – and that the Chinese were also becoming a formidable rival with "their own new aircraft coming on the market to compete with the 737 Max 8s and 9 ".

This then created a strong incentive for Boeing to maintain its 737 Max 8 – used by many Air Canada carriers at Air China – at a steady pace, he said, and that "the economic factors were clearly the background. "

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In the administration of the former businessman, Donald Trump, the convergence of business interests and politics is more complicated than ever.

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The Trump administration and Congress have important interests for businesses, from tobacco to technology, lobbyists donating to political campaigns and pouring money into Super PAC supporting various candidates.

Several Trump White House appointees have also reported links with companies, such as Commerce Secretary Wilbur Ross and Education Department Secretary Betsy DeVos.

The first of the large Boeing 737 MAX 9 models is located at the front end of the assembly line and is ready for deployment at the company's production site on Monday, February 13, 2017 in Renton, Washington. (Photo credit: AP Photo / Elaine Thompson)

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Boeing in particular has made significant donations to various politicians – Democrats and Republicans – and has always had close relations with the government. One of the first contracts of the company concerned the supply of float trainers to the US Navy.

In December, Trump named Patrick Shanahan, who spent 31 years at Boeing at the head of the 787 Dreamliner, was named Acting Secretary of Defense.

And Boeing appointed Nikki Haley, former United States Ambassador to the United Nations, to Trump, to join his board in late April.

"There should be a congressional hearing"

The issue of airworthiness certifications is another potential area of ​​darkness.

Jim Hall, former head of the National Transportation Safety Board (NTSB), told Yahoo Finance that one of the reasons why private interests have undermined aviation safety is a special law that allows Boeing to control herself.

In other words, due to a rule established in 2005 by the FAA, airline manufacturers can choose their own employees who would determine whether the aircraft is safe or "seaworthy" Hall explained.

"There should be a congressional hearing to review the certification process," Hall said. "Information and effective accountability have shifted from the FAA to Boeing as a result of this change."

An Air Canada Boeing 737 MAX 8 is approaching Toronto Pearson International Airport to land on March 13, 2019 in Toronto, Canada. (Photo: Cole Burston / Getty Images)

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Captain John M. Cox, a retired pilot from the United States, who also runs a company called Safety Operating System and has been flying 737 aircraft for 15 years, has minimized the risk.

"This has been a long-standing situation," Cox told Yahoo Finance. "These are very specific trainings, designated individuals with great expertise are authorized to ensure FAA compliance and compliance and to report to the FAA."

Cox continued, "There is always oversight and these appointed representatives are monitored and requalified regularly. Although they can work for [Boeing], their responsibility is that of the FAA. "

Hall's other criticisms of the FAA relate to the fact that the FAA has no permanent leadership at this time – only an interim administrator – and that the FAA did not have the funds to function effectively.

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Another drawback is that a WSJ report released in February suggested that the government shutdown between December and January could have delayed the resolution of the 737 Max 8 software issue.

After the Lion Air crash in October 2018, according to the report, unnamed US officials who reviewed the findings disagreed with Boeing over a fix on the flight control function of the aircraft.

The disagreements allegedly focused on technical and technical problems and the extent of the corrective, they explained, which was suspended for five weeks due to the closure.

The FAA, however, dismissed the accusations at a press conference held Wednesday night.

The NTSB logo is on display at a child safety event at Trailside Middle School in Ashburn, Va., August 25, 2015. (Photo: PAUL J. RICHARDS / AFP / Getty Images)

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In any case, the longest interruption in history has had consequences in terms of security.

The NTSB told Yahoo Finance that while it had done some of its investigative work despite the dismissal of its staff because of the closure – which includes the Lion Air crash – it had failed to to prevent several others.

"Ninety-seven accidents on which the NTSB was unable to investigate due to the fact that employees were fired to include the following items that now require investigation," said a spokesman for NTSB to Yahoo Finance.

In addition, "the investigators were unable to respond to major accidents … This means that after the stop, we missed opportunities for prevention."

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aarthi is a writer for Yahoo Finance. Follow her on Twitter @ aarthiswami."data-reactid =" 157 ">Aarthi is a writer for Yahoo Finance. Follow her on Twitter @ aarthiswami.

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