(Bloomberg) -- The union for Southwest Airlines Co. pilots sued Boeing Co., saying the manufacturer rushed output of the 737 Max jet to stay competitive, withholding key information about a feature that contributed to two fatal crashes within five months.
“Boeing made a calculated decision to rush a re-engined aircraft to market to secure its single-aisle market share and prioritize its bottom line,” said the Southwest Airlines Pilots Association suit. The union said it’s seeking at least $115 million for damages sustained through the end of this year, primarily for lost pay and legal expenses.
“Boeing abandoned sound design and engineering practices, withheld safety critical information from regulators and deliberately misled its customers, pilots and the public about the true scope of design changes,” the suit said.
The lawsuit and public criticism from Southwest’s pilots undermine Boeing’s effort to rebuild confidence in its best-selling airplane after months of bruising publicity. The planemaker has invited pilots from Max operators to fly the updated software as part of outreach to flight crews.
Southwest is the largest operator of the Max, which has been grounded worldwide since March. Parking its 34 Max planes and failure to get new ones on order has cut at least $225 million from the airline’s operating income and caused tens of thousands of flight cancellations. The jet has been pulled from Southwest’s schedule through Jan. 5.
“We believe this lawsuit is meritless and will vigorously defend against it,” Boeing said by email. “We will continue to work with Southwest Airlines and its pilots on efforts to safely return the Max to service.” Its shares were little changed after the close of regular trading.
Southwest reiterated that it plans to use profit-sharing to provide employees part of any compensation received in a settlement with the planemaker. It didn’t comment on the substance of the union claims.
The Max crashes of Lion Air and Ethiopian Airlines flights have triggered probes beyond the accidents into Boeing’s design process for the aircraft -- a retooled version of its workhorse 737 -- and whether safety reviews and certification by U.S. regulators were compromised. Boeing was trying to stay competitive with the Airbus SE A320neo, which could fly farther and burn less fuel.
The lawsuit was filed Monday in state court in Dallas, according to the union. The filing couldn’t be immediately confirmed at the court.
The complaint cited news reports, statements made by officials and other sources to support its allegations. Yet aside from a safety board recommendation, none of the official reviews and investigations into how the Max was designed and approved for flight have issued public findings. They include a criminal probe led by the U.S. Justice Department.
Boeing has said there was no breakdown in the design, testing and Federal Aviation Administration approval of the Max.
Both the Lion Air crash on Oct. 29 and the Ethiopian Airlines crash on March 10 occurred after a malfunction triggered a new feature, the Maneuvering Characteristics Augmentation System, to repeatedly push the planes into dives. The accidents killed a total of 346 people.
Until the Lion Air crash in Indonesia, airlines and pilots hadn’t been told of the existence of MCAS, which had been installed to counteract the effects of the Max’s larger engines on the existing 737’s airframe.
Boeing also played down design changes in the Max to convince regulators and airlines that time-consuming training wasn’t needed because the plane was an update to the previous model, the 737 Next Generation, the lawsuit said.
The planemaker didn’t share those differences, including MCAS, during work with Swapa and Southwest as recently as 2016, the union said. That persuaded the pilots group to include the Max with other 737 variants under a new contract, easing the rollout of the new plane for Boeing’s launch customer, Swapa said.
“Had Swapa been aware of MCAS and the true extent of differences between the 737 NG and the 737 Max, it never would have agreed to pilot the 737 Max,” said the union, which represents nearly 10,000 Southwest pilots.
The union decided to sue Boeing after failing to reach an agreement in talks that began in late August, said Jon Weaks, a Southwest captain and president of the labor group.
Pilots are paid for time spent flying, and the grounding of the Max forced Southwest to cancel 30,000 flights, according to the union.
Boeing has revamped the Max to prevent the same malfunction from occurring and is fine-tuning the plane’s flight control software. The manufacturer has targeted the fourth quarter for the grounding to be lifted.
Southwest has said it would take about 45 days after the ban is lifted to have the Max ready to fly.
The House Transportation and Infrastructure Committee last week asked Boeing to make available a company engineer who filed an internal ethics complaint this year about Boeing’s safety culture. The panel is investigating the certification of the Max by U.S. aviation regulators.
(Updates with Boeing’s comment in sixth paragraph.)
--With assistance from Alan Levin and Julie Johnsson.
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