Boeing 737 Max: The FAA wanted a safe plane – but didn’t want to hurt America’s
Recent incidents aside, air travel is incredibly safe these days.
Global airplane fatalities averaged 840 a year from 2010 to 2018, compared with almost 2,000 in the 1990s. In fact, this decade is on pace to see the fewest casualties since the dawn of jet travel in the 1930s.
Yet the March 10 crash of Ethiopian Airlines Flight 302 serves as a stark reminder that despite the significant safety gains in commercial aviation, accidents are still possible. And when they occur, the number of fatalities is often large.
What makes the most recent crash particularly concerning is that the airplane design may have played a significant contributing role. Perhaps even worse, there are early indications that regulators at the Federal Aviation Administration – the agency that oversees the development and certification of all U.S. airplanes – may have been more concerned about bringing the Boeing 737 Max to market than about consumer safety.
In addition, recent analyses suggest that Boeing made several misjudgments when it designed MCAS and hasn’t been fully forthcoming with both the FAA and airlines about how it worked. The airline has also been accused of providing inadequate training for pilots.
‘Regulatory capture’ at the FAA?
This has led critics to argue that the FAA has gotten too close to the entity it was supposed to oversee.
This situation – when regulatory agencies created to protect the public interest become overly entangled with commercial and special interests – is known as “regulatory capture.” Many see this as corrosive for society. The 2010 Deep Water Horizon oil explosion, the largest marine spill in history, is considered an example of this.
Yet, capture is difficult to prove, especially in an era when businesses must work closely with government to ensure that agency officials have the best and latest technical information to develop and issue appropriate regulations.
During this process, public regulators are supposed to act in the “public interest.” However, the term is inherently vague and open to a multitude of competing interpretations. Unless it involves outright bribes or other corrupt activities, business influence on regulators fails to amount to criminal conduct.
To us, it seems that the FAA was simply caught in an impossible position between the competing goals of protecting consumers and protecting American business interests. In this case, the pendulum may have swung too far to the side of the latter.
Unquestionably, we want our airplanes to be safe. And, to be clear, we believe Boeing does as well. Yet we also want American companies to be successful, and regulations are inherently costly and time-consuming for businesses, many of which are competing with companies worldwide.
It is not surprising that Boeing was eager to move forward with the 737 Max as fast as possible. Nor is it surprising that the FAA and other regulatory bodies are hesitant to impose excessive burdens on American companies – particularly on one of the nation’s premier exporters.
And generally, business interests tend to be much more successful in obtaining their preferred regulatory outcomes than public interest groups. Our own recent work shows that the White House – regardless which party controls it – is more likely to interfere with regulations coming out of more liberal and arguably pro-regulatory agencies.
The pendulum keeps swinging
The existence of competing incentives confronting regulatory agencies is nothing new. Public agencies must serve a multitude of goals and objectives and somehow find an appropriate balance.
Yet, at times, the balancing act by public agencies may tilt too far in one direction. And unfortunately, when the imbalance occurs at agencies tasked with protecting public safety, the consequences can be exceedingly dire.
It seems likely that increased public scrutiny in the wake of the two crashes may force the FAA to take a more aggressive stance on the side of consumer safety in the future. Eventually, however, business interests are likely to begin pushing back, and once again the pendulum will swing the other way.