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Bad Code, Crashes Send Boeing to Record $2.9 Billion Loss: Software Fixes Ongoing

"We are confident that is a software update not a hardware update"

By CBR Staff Writer

Boeing reported a record quarterly loss this week as the three software issues discovered so far in the wake of two crashes rocked customer confidence.

The company reported a net loss of -$2.9 billion on earnings of $15.7 billion for the second quarter of 2019, against +$2.1 billion and $24.1 billion for Q2 2018.

It continues to work with US aviation regulator, the FAA, to certify a 737 MAX software update following two deathly crashes of the plane.

See also: Two Crashed Planes: One Large Software Upgrade Pending

“Our teams are daily working on software updates, running through simulator sessions”, CEO Dennis Muilenberg told investors on Wednesday.

He hopes to have the plane back in the skies in Q4.

Two 737 MAX crashes thus far have killed 346 passengers: the first on October 29, 2018, when Lion Air Flight 610 crashed into the sea shortly after taking off from Jakarta, Indonesia. Then on March 10, 2019 Ethiopian Airlines Flight 302 crashed minutes after takeoff from Addis Ababa, Ethiopia.

Those crashes were linked to Critics allege that the company was employing temps from an outsourcing company making just $9 an hour to develop and test software.

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A former Boeing software engineer, Mark Rabin, told Bloomberg that coders from Indian outsourcing giant HCL were working to specifications set by Boeing but that “it took many rounds going back and forth because the code was not done correctly.”

Boeing Earnings: New Software Updates Demanded

Work to fix the code is ongoing, Boeing said this week, including new issues raised last month by the FAA that have been linked to computer hardware failures.

“Last month the FAA directed us to address a specific condition of flight… that the planned software update did not previously address. We agreed with the FAA’s decision and we are currently working on the software changes to address this requirement”, Boeing CEO Dennis Muilenburg told investors on a conference call.

Answering a question on the Boeing earnings call from Barclays’ Davis Strauss, he said: “On the software update that’s going on, we are confident that is a software update not a hardware update.

“Our process here as we step through certification is, we have the regulators come in and fly in our simulator and we test out a number of different conditions that are all part of the final certification. And during those simulator sessions… we decided that we would make this software update to mitigate a potential risk.

“And this was a simulated failure in the microprocessor of the airplane as previously reported. There is a software update to address that risk area. It’s an understood update and we’re in the middle of working our way through that.”

Training to Switch to Simulators

Training, meanwhile, is likely to switch to wider use of simulators, he told investors.

“We do expect that in the end that we’ll have a consistent set of computer-based training that all airline customers will use and there will likely be some selective use of simulator-based training. It depends on the maturity of the fleets and whether they already have MAX aircraft or whether MAXes are new to their fleet.

“Some airlines will use simulator training as part of their normal recurrent training. Some may want training upfront before they fully return the fleet to service.”

Lev Lesokhin, EVP Strategy and Analytics at CAST, the MRI scanner for code, said in an emailed comment: “Airplane avionics systems have over five, sometimes 10 million lines of code. It’s beyond human comprehension, and requires regular, automated end-to-end inspection to prevent serious safety flaws.

He added: “As our reliance on software increases, it will be impossible for profit-driven enterprises to self-regulate software safety. Any safety-critical system, such as airplanes, medical devices, and autonomous vehicles, need to be checked against a software engineering standard, such as the one from CISQ.”

Boeing says its backlog of orders “remains healthy” at more than 5,500 airplanes worth $390 billion.

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