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> With the dawn of the 1980s, however, Boeing’s traditional way of doing things seemed increasingly out of touch. Deregulation under US presidents Jimmy Carter

> With the dawn of the 1980s, however, Boeing’s traditional way of doing things seemed increasingly out of touch. Deregulation under US presidents Jimmy Carter and Ronald Reagan had changed the economics of the industry, Greenberg said. “The idea was that if you had more competition, it would drop prices for consumers. Suddenly, airlines are looking at this and saying, ‘Oh my God, we can’t pass on the cost by continuously raising ticket prices.’ That put pressure back on Boeing, and on Airbus eventually, to become cost-conscious.” I think the ultimate root cause that led to the 737 MAX crisis was de-regulation and the airlines race to the bottom on price. The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. I used to think that highly competitive markets with low prices are the best, but now I am not so sure. Those kind of markets tend to push the quality down as well as squeeze the workers. Compare the union workers for the Big Three during the 1970's to that of the gig economy workers now. Maybe an oligopoly with high profits and strong unions is what is best in the long term? Or maybe, we need to alternate periods of disruption and highly competitive markets with periods of stability and oligopolies? I suspect we as a society will have to try to figure that out, and that it is not a simple answer.

SftwrSvior81 7y ago
I think you're right that highly competitive markets can push down quality but that happens because the customer accepts the lower quality. If air lines or the customers actually flying on these planes decided that they were not going to buy/fly on Boeing planes, the quality issue within the market would be resolved fairly quickly. Either Boeing would produce higher quality planes or they would go out of business and their market share would be taken over by a competitor with higher quality. Of course, I'm assuming that such a competitor exists. In case they don't, my argument becomes invalid.
- somurzakov 7y ago
  if US allowed foreign airlines to serve domestic routes, that would be the case
- EarthIsHome 7y ago
  > that happens because the customer accepts the lower quality. What choice do we have? Even if there is a choice, the majority of consumers don't have the luxury of choosing.
  - SftwrSvior81 7y ago
    In my opinion, we all have the choice of not flying on Boeing planes any longer. If a company shows that they are willing to put profits above their customers' lives, then customers should not do business with that company any longer. The customer has to provide an incentive to the company to not do this. Going out of business is a very powerful incentive, I believe. If a company can kill a couple of hundred of its customers and still continue to make money, then why should it do anything differently, especially if the decision that caused the deaths also caused higher profits?
- yourMadness 7y ago
  Of course the customer accepts the lower quality. Dying once every 10 million flight hours instead of every 1000 million flight hours is a fair price to pay for 10 USD of savings.
  - jonny_eh 7y ago
    If you're talking about airline passengers, they have no choice in which plane they fly in.
    - tedunangst 7y ago
      It's not hard to see which planes fly which routes.
      - tirpen 7y ago
        A lot of routes have only one airline though.
      - jen20 7y ago
        It's also not guaranteed which plane will fly which route. Every airline has "substitution" rules in their conditions of carriage, and frequently use them.
        jonny_eh 7y ago
        Plus, flights get cancelled, and passengers get re-routed last minute.
        mopsi 7y ago
        Depends on airline. Southwest, for example, has Boeing-only fleet. JetBlue has only Airbuses and Embraers. The odds of buying a JetBlue ticket and ending up on a Boeing are fairly low compared to flying Southwest.
        frozenlettuce 7y ago
- margalabargala 7y ago
  A further complicating factor is that quality can be masked from the customer, and indeed will be if that's less expensive than actually improving the quality. And thus no one will actually know that Boeing's planes are of lower quality, until a couple hundred people die.
- munificent 7y ago
  > because the customer accepts the lower quality. This presumes a perfect market where customers are rational actors with access to a variety of sellers whose product differs only on quality, which consumers have access to accurate information about and the time and expertise to precisely evaluate. Of course the reality is we're just trying to book a flight to get home before Mom's chemo starts and all we know about each airline is the ticket price and how good the peanuts were the last time we flew on them. Airlines are about the last industry on Earth where we should expect laissez-faire capitalism to produce optimal outcomes.
  - SftwrSvior81 7y ago
    I wasn't suggesting that the customers could have known beforehand that the Boeing planes had issues that would cause crashes. However, we do know NOW that Boeing planes have quality issues. If customers still willingly get on those planes, then where is the incentive for Boeing to do anything differently? That's really the point I was trying to make. We don't need perfect information to now decide to not fly on Boeing planes. That would send a very strong message to the entire industry that putting profits above customers' lives will be met with very negative consequences such as reduced or loss of profits and possibly the company going out of business.
    - inimino 7y ago
      > where is the incentive Regulation.
- rightbyte 7y ago
  Unless you are an aerospace engineer or pilot I don't think you can judge the quality of a plane under the surface. I note the leg space and if the plane is noisy or shakes much.
  - SftwrSvior81 7y ago
    One doesn't need to be an aerospace engineer to know that Boeing planes crashed because the company leadership decided to forgo quality for the sake of profits. Before the crashes, I agree, there was no reason for customers to expect Boeing planes to be unsafe. However, now that this information has become public, any customer can decide to not fly on their planes.
    - inimino 7y ago
      Is it rational for a customer to not fly on a plane that is as safe as any other just because the same company later made another plane that was less safe? It seems like a lot to ask. In any case, even if 10% of people totally stopped flying on Boeing, which would be a wildly optimistic outcome for any organized consumer action, the airlines would just discount those flights ever so slightly and the other 90% of price-conscious consumers would immediately take up the slack. Nobody's going out of business in that scenario. This is, of course, why we rely on regulation rather than consumer choice to ensure safety, and why this is a failure of regulation, not of the market.
- richardwhiuk 7y ago
  This also assumes perfect knowledge, which isn't true.
- ssalazar 7y ago
  Nobody knew the 737 MAX was lower quality until it started falling out of the sky. I think we can agree that an ideal system wouldn't require people to die horrifically in the process of price discovery.
  - SftwrSvior81 7y ago
    Absolutely, I 100% agree with this. I wasn't arguing that the current system is anything even close to ideal. I was trying to point out that now that we, the public, have paid this horrendous price, we are still not using the information gained. A company that shows that they will put profit above their customers' lives should be abandoned very quickly by its customers. That isn't happening and the fault for that lies with the customers, IMO.
ip26 7y ago
The market is just an optimizing function. Perhaps the problem is not competitive markets but rather the structure of the market, e.g. the optimization parameters & feedback loops.. For example, a common criticism of the medical market is that without accurate quotes, you cannot price compare- thus it's not a properly functioning free market with the appropriate feedback cycles, and the free market approach to fixing it would be to improve price information.
jessant 7y ago
Most people seem to prefer lower prices to higher quality. That is why airlines have responded that way.
pnathan 7y ago
> I used to think that highly competitive markets with low prices are the best, but now I am not so sure. Those kind of markets tend to push the quality down as well as squeeze the workers. I have also mostly changed my mind here. Largely because I've worked in a quality focused shop and seen the difference. But, I also appreciate that cheaper means more people can access goods and services, even if at a lower quality.
- hackernewsboy 7y ago
  The solution can be an arrangement with multiple tier products with different quality control and assurance.
  - elliekelly 7y ago
    In some markets, yes. But in most markets there needs to be some minimum acceptable standard of QC & assurance. In the market for aluminum tubes hurling through the skies at 500 mph it's to everyone's benefit to make sure they don't come crashing to the ground. Even markets for more innocuous products/services require some minimum acceptable standard or else the race to the bottom will give us more affordable but more dangerous products: Thomas the Tank Engine ($3) vs Deluxe Thomas the Tank Engine with Lead-Free Paint ($5)
  - hannasanarion 7y ago
    Which is what we already have at the consumer end of airline pricing. The economy seats on an airplane put together aren't enough to pay for the cost of fuel. Business and first class passengers are the only ones that make the airlines any money.
    - caoilte 7y ago
      Given I've regularly flown on flights where over half the plane were business/first I'm not sure that necessarily means what it seems.
      - 7y ago
linuxftw 7y ago
Free markets work. What doesn't work is absolving individual liability via corporations.
justapassenger 7y ago
Living in first world country it's easy to be biased against race to the bottom - it hurts previously very well paid jobs and breaks established status quo. But that race to the bottom made cost of flying at least order of magnitude more affordable, and as a result likely saved and improved countless numbers lives (lifting out of poverty, ability to travel for treatments, ability to see your loved ones, ability to travel for work, etc). And to put things in perspective - air travel is still safest form of travel, even accounting for MAX, and during this whole race to the bottom it was constantly improving, by orders of magnitude.
- jacobolus 7y ago
  > made cost of flying at least order of magnitude more affordable, and as a result likely saved and improved countless numbers lives Except for the climate change part. Continued carbon emissions threaten billions of lives. To keep our planet inhabitable current-fuel air travel must be reduced to a tiny fraction of its current scope within the next few decades (alongside many other drastic changes to transportation, industry, and electricity generation). It’s not clear that alternative power sources for air travel will be practical at large scale any time in the near future.
  - MartianSquirrel 7y ago
    > Except for the climate change part. This is out of context. Same thing could be said with the advent of the internet and massive energy consumption that came with it. The debate here is about the effect the technology had on day to day human lives, not on the optimization of it afterwards.
    - jacobolus 7y ago
      Global air travel is projected to significantly increase in the future without any obvious way to sufficiently reduce its carbon footprint. The internet can be plausibly powered by low-carbon energy sources using present technology. If you uncritically define negative consequences as “out of context” then every technology can be declared to be an unalloyed good.
Symmetry 7y ago
I don't think this has anything to do with airline deregulation. The FAA has really done an excellent job of managing the various airlines and it's an example I'd point to of how regulation can work correctly in that context. Mostly that's because airlines are even more interested in preventing their competitors form cutting corners that put airline crashes in the news than they are in cutting corners themselves leading to a good sort of regulatory capture. But Boeing itself isn't one of the many airlines and is the singular US plane exporter champion. Wheras Delta, Southwest, et al want to see that the FAA isn't giving Jet Blue a pass there's mostly only Boeing to check whether Boeing is given too much of a pass and political pressure from up high is targeted at making Boeing better positioned to compete with Airbus which the FAA doesn't have jurisdiction or input from. So I think it's really a different situation.
gdubs 7y ago
Deregulated or not, the airframe business is essentially a duopoly of Boeing and Airbus.
toast0 7y ago
> I used to think that highly competitive markets with low prices are the best, but now I am not so sure. The market for air travel is highly competitive, the market for airplanes is not. In the market that the 737 serves, there's options from Boeing, Airbus, Tupolev and maybe Comac. Comac and Tupolev are deeply connected with the governments of China and Russia respectively; Airbus and Boeing are heavily subsidized by European and US government too, although more independent. There's a few more manufacturers if you include slightly smaller jets. Building high capacity passenger jets has large inherent barriers to market, but then you also see things like Bombardier being forced into partnership with Airbus when it tried to develop a new jet around the market of the 737. Long manufacturing queues and logistical difficulties of mixed fleets also make it hard for airlines to switch models or manufacturers, especially for smaller airlines.
- cameldrv 7y ago
  The main reason Bombardier sold the CSeries to Airbus was that it was about to be hit with big tariffs that would have made it noncompetitive in the U.S. market. Airbus has a U.S. production plant in Alabama that can do final assembly and avoid the tariffs.
wolfgke 7y ago
> I think the ultimate root cause that led to the 737 MAX crisis was de-regulation and the airlines race to the bottom on price. The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. Can't you also plausibly in a similar spirit argue for the point that the regulations about retraining pilots were responsible for the 737 MAX disaster? Otherwise Boeing would not have made such crazy engineering decisions about its design.
- azernik 7y ago
  The regulations here are generally sane - the retraining requirement for a new plane is an unavoidable necessity. Boeing tried to game the regulations, and because of cuts the regulator didn't have the manpower to catch them. Classic "starve the beast" - cut funding to government so it fucks up, then claim government is incompetent and so should be smaller.
  - WorldMaker 7y ago
    Plus, studies by even Boeing themselves after the fact showed that retraining caught the problem, further cementing that retraining is a good thing. Had more pilots retrained specifically for the 737 MAX (rather than on older 737 simulators or test flight 737 vehicles that airlines had lying around from earlier models), a larger alarm would have been rang before problems were experienced in the wild at the worst possible time (when people's lives are endangered).
- borkt 7y ago
  What do you mean regulations about retraining pilots? Any time you change airframe you generally have to retrain, and it really isn't that big of a deal, just an expense. My father-in-law retrained from the MD-11 to the 777 a few years back at over 60 years old and did completely fine. The regulation to retrain on a new plane is absoloutely reaonable and it was boeing trying to pretend the MAX was similar enough to the next gen that caused the issue. In terms of inherent flight characteristics it never was similar, and no amount of software could make up for that.
vibrolax 7y ago
The civil air transport airframe business environment was brutal long before Carter and Reagan. Look at the history of Lockheed, Convair, Dehavilland, etc. in the development of passenger jets during the 50's, 60's, and early 70's. There has always been a lot of technical and economic pressure in this business.
- rossdavidh 7y ago
  An excellent point.
akira2501 7y ago
> I used to think that highly competitive markets with low prices are the best They probably are.. but it's probably not wise to consider a market dominated by three players as "competitive." > Maybe an oligopoly with high profits and strong unions I also don't think "more monopoly" is the sensible conclusion. > and that it is not a simple answer. Why is "more government regulation" not even a part of your consideration? The article itself even hints at this, before deregulation a company like Boeing could exist and be profitable, but after deregulation it becomes beholdant to Wall Street. It seems pretty clear what the solution is.
- kapuasuite 7y ago
  Regulation and price controls aren’t the same thing, which you seem to be implying.
  - pjscott 7y ago
    Most regulations aren't price controls, but the historical regulations being discussed here are. In the US, routes and prices used to be decided by the Civil Aeronautics Board, removing price competition between airlines. After the price controls were dropped, air travel became a lot more affordable and profit margins got smaller. "Airline deregulation," in a US context, refers to this. (The terminology is a bit unfortunate, but we're stuck with it for now.)
cameldrv 7y ago
The 737MAX was still safer than air travel in the 1970s. Boeing definitely screwed up, but it's a mistake to overstate how dangerous it really is. It's still far safer than driving. Air safety has advanced to a point where we're capable of having almost zero fatal accidents, which IMO leads us to overemphasize each one that still happens. Ultimately, the airlines wanted a common TC and type rating for very good reasons -- it saves money, i.e. human effort in pilot training, the number of pilots that need to be on reserve, maintenance training and staffing, spare parts inventory, etc. These are all laudable goals, and to simply say that Boeing should have designed a new plane is too simplistic. The real problem IMO was the contracts Boeing signed with very high penalties for delivering late or having any additional training whatsoever. This didn't give the engineers enough flexibility or time to design a safe augmentation system, especially after the discovery during test flights that the pitch instability was worse than expected. That led to a quick patch-up job that totally compromised the redundancy of MCAS. It's also clear in hindsight that the FAA handed too much authority to Boeing on the certification side, and that they should have been scrutinizing their safety analyses more. That is clearly happening now, to Boeing's consternation.
- Arn_Thor 7y ago
  I'm not sure how those figures shake out, so if you could provide a source that would be terrific. Deaths per unit of distance flown for the 737MAX vs a comparable 70s plane. And still, even if that is the case, the anger stems from the fact that corners seemed to have been cut and warnings ignored. In other words this was not some unforeseen event that was unavoidable. It was in fact avoidable
  - cameldrv 7y ago
    According to Wikipedia, the 737MAX flew 500,000 flights before it was grounded. According to this: https://randy.newairplane.com/2018/05/22/737-max-a-year-of-serving-the-globe/ https://randy.newairplane.com/2018/05/22/737-max-a-year-of-s... The average 737MAX flight was about 3 hours. Typically 3 flight hours is about 1250 miles, so the 737MAX flew about 625 million miles, for about 3 fatalities per billion passenger miles. Here's the best data I could find from the U.S.: https://www.researchgate.net/publication/229020495_Aviation_Deregulation_and_Safety_in_the_United_States_Evidence_After_Twenty_Years/figures?lo=1 https://www.researchgate.net/publication/229020495_Aviation_... It looks like the U.S. in the 1970s had about 1 fatality per billion passenger miles. To get to 3 per billion, you have to go back to the early-mid 60s. I wasn't able to get worldwide data, but generally the rest of the world has lagged behind the U.S. by a factor of at least 3x. Cars are about 7 per billion passenger miles (https://www.reddit.com/r/urbanplanning/comments/bw0msc/passenger_fatalities_per_billion_passenger_miles/ https://www.reddit.com/r/urbanplanning/comments/bw0msc/passe...)
narrator 7y ago
I know this is Hacker News and we like to blame politicians or rich non-engineers, but isn't the 737-Max case a case of very bad engineering that they could have done better? Maybe management had a hand in that, but the final outcome is the engineering was terrible and it's not simply the fault of deregulation in the 80s.
- rossdavidh 7y ago
  I think part of that is, had there been different engineers there, it is not so clear that the outcome would have been different, but with different management decisions (e.g. whether to make a new plane or try to pretend it was still the 737) things could have been different. Was the MCAS a lone example of rushed, poorly tested work done by people without enough knowledge of the industry they were working for? Or is it just the first one to come to light, because the MCAS caused the plane to be grounded before any others did? We don't know, but my guess is, based on the other news coming out about the 737MAX since it was grounded, that there are other issues like this lurking. This tends to suggest that the problem is cultural, and the corporate culture is one of the primary responsibilities of the people in command.
- ananonymoususer 7y ago
  Muilenburg is to blame. He got the stock price up by getting rid of all of the more experienced (older) higher paid engineers who knew to not make the sort of mistakes that were made on the 737-Max. I was a happy 35+ year Boeing employee who would have stayed where I was for maybe another ten years, but Muilenburg made my choice to retire very easy by changing the terms of the (retirement) plan to give me a compelling reason to leave. If I had stayed, I would have effectively taken a pay cut of about 20% because of the reductions to my defined benefit payout. Instead, I found a better job elsewhere for a 20% raise and took the early retirement.
- rkangel 7y ago
  To do good engineering, you need good engineers and you need a culture of good engineering. You need an organisation and incentives that encourage doing things well. Looking at it through a software lens - even if you do have the best people, if your project structure squeezes development time, rather than producing solid code and catching all the bugs early, you'll produce flaky code that will produce surprises down the line. Then on top of that, such will lose some of its best engineers (because they get frustrated) and probably won't attract new good ones because they don't value them sufficiently to pay them enough.
Vervious 7y ago
A competitive market should improve the quality of planes: no one should buy a Boeing if there is a viable alternative. Allowing the merger reduced competition. We really shouldn't blame deregulation (in the sense of reducing the barrier of entry to airline markets). Lower airline ticket prices (Europe is a case in point) is better for everyone. And if quality were indeed lower, then another company should be able to swoop in and capture a higher tier quality market if there are people willing to pay for it (like first class, or business class) Lack of anti-trust enforcement in the aerospace manufacturing industry is entirely orthogonal and hurts plane safety.
rhizome 7y ago
>The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. I thought it was to avoid FAA airworthiness recertification.
epx 7y ago
No, this other extreme is not desirable either.
pjscott 7y ago
Air travel is so much safer than traveling by car that anything you can do to bring down its price is probably a big safety win -- including corner-cutting on airplane safety.
whermans 7y ago
The free market can work - if certain safeguards are in place to ensure the race to the bottom doesn't negatively impact either the safety and suitability of the products and services produced, or the wages and benefits paid to workers. Remove those and you end up with misery.
carlmr 7y ago
>The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. If you ask me this is a problem in every highly regulated industry. You often find that the regulations have exceptions for smaller changes. What then happens is that you have many tiny changes that are made to fly under the radar, because it's unduly expensive to recertify after a big change. This makes it impossible to do big changes that are necessary to get rid of technical debt. Since it's impossible to get management approval for these. And technical debt keeps on building up. If the incentives were more continuous (not sure how this is possible), instead of abruptly changing (no training <-> full training dichotomy), then we would see fewer of these cases. So cases like this become a question of certain cost vs. risky reward (cheating or other hacky solutions). And if you've already invested in a few hacky solutions and not been caught, then the incremental risk seems to go lower, while the abrupt cost change stays the same. It also goes hand in hand with the normalization of deviance (https://danluu.com/wat/ https://danluu.com/wat/). If everything you've done for the last 60 years is incrementally adding hacks to the 737, then the one on the 737 MAX doesn't seem crazy anymore.
- Arn_Thor 7y ago
  I think part of the problem is the focus on the financial figures for the next shareholder call. With a significantly longer time horizon it would be easy to justify investment in a total redesign, because it would lead to a number of cost savings down the line as technical debt was eliminated. And all for the low, low price of one comprehensive new government approval. Instead it seems the goal was to get a moderately viable product to market as fast as possible, and the fastest and cheapest way was force some changes and fly under the regulators' radar. That's at least one alternative perspective worth considering.
- kd5bjo 7y ago
  > If you ask me this is a problem in every highly regulated industry. You often find that the regulations have exceptions for smaller changes. Another example of this is getting planning permission to build a house. Renovations are generally easier to get approved than new construction and keep any variances that have already been granted, so you’ll occasionally see someone “renovate” a house by tearing down everyrhing except for a single wall and building completely new otherwise.
CaptainZapp 7y ago
I think the ultimate root cause that led to the 737 MAX crisis was de-regulation and the airlines race to the bottom on price. The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. No! That's shifting the blame away from those that engineered and built that death trap. Which is the Boeing Corporation. If airlines demand features, which are just not feasible to provide at the price range they're willing to pay then it's the plane makers responsibility not to provide such planes. Period! The core issue (apart from what happened much earlier, after McDonnel's reverse take over) was not the fact that airlines were trying to drive the price down, but that Boeing didn't have a competing product in the most critical market and wouldn't have one for a decade if they engineered a modern plane. So they hacked an ancient 60th design to modern standards and shunned, demoted or simply fired engineers, which dared to raise concerns. Having the FAA in their pockets and spending tons of cash on lobbying instead of investing it into the construction of good reliable planes also didn't help. This one's on Boeing. Not on airlines and certainly not on pilots. It's on The Boeing Comnpany; period! And what galls me most is that the only entity, which was in a position to know what was wrong after the first crash did everything in it's power to blame, befuddle, obstruct and deflect from the real cause. MCAS, which wasn't even documented in the manuals at that time. In that sense the second crash is corporate mass murder for profit and I really hope that C level people go to jail for that one (alas, I doubt it).
ptah 7y ago
> highly competitive markets with low prices are the best in some cases yes, in others no. use the right tool for the job
nickbauman 7y ago
High competitive / low prices marketeering at best gives you Walmart: where none of the products are very good, false values products are vaunted (the one gallon pickle jar for $4.99) and nobody is especially enthused about what's on offer. At worst you get things like the gig economy.
geofft 7y ago
Free, deregulated markets work well when the market participants have high information about what's in the market. If you're interested in buying, say, books, there's not much need to regulate what's in the books - customers have a pretty good idea, they can page through the book at the bookstore, and they can read what reviewers say. Customers don't have any idea about which airline is safer. Airlines rarely have an idea of which airline is safer - shortcuts taken in manufacturing might lead to problems 20 years down the line when no human who was involved in the engineering or purchasing work is still at either company.
mgoetzke 7y ago
Free markets push everything to the level of just bearable. Bad, but not quite bad enough not to use a service you rely on. Seats are tight, just not tight enough to make people in general seriously consider to not fly because of that. Food is bad, just not bad enough for people not to eat it.

SftwrSvior81 7y ago

I think you're right that highly competitive markets can push down quality but that happens because the customer accepts the lower quality. If air lines or the customers actually flying on these planes decided that they were not going to buy/fly on Boeing planes, the quality issue within the market would be resolved fairly quickly. Either Boeing would produce higher quality planes or they would go out of business and their market share would be taken over by a competitor with higher quality. Of course, I'm assuming that such a competitor exists. In case they don't, my argument becomes invalid.

somurzakov 7y ago
if US allowed foreign airlines to serve domestic routes, that would be the case
EarthIsHome 7y ago
> that happens because the customer accepts the lower quality. What choice do we have? Even if there is a choice, the majority of consumers don't have the luxury of choosing.
- SftwrSvior81 7y ago
  In my opinion, we all have the choice of not flying on Boeing planes any longer. If a company shows that they are willing to put profits above their customers' lives, then customers should not do business with that company any longer. The customer has to provide an incentive to the company to not do this. Going out of business is a very powerful incentive, I believe. If a company can kill a couple of hundred of its customers and still continue to make money, then why should it do anything differently, especially if the decision that caused the deaths also caused higher profits?
yourMadness 7y ago
Of course the customer accepts the lower quality. Dying once every 10 million flight hours instead of every 1000 million flight hours is a fair price to pay for 10 USD of savings.
- jonny_eh 7y ago
  If you're talking about airline passengers, they have no choice in which plane they fly in.
  - tedunangst 7y ago
    It's not hard to see which planes fly which routes.
    - tirpen 7y ago
      A lot of routes have only one airline though.
    - jen20 7y ago
      It's also not guaranteed which plane will fly which route. Every airline has "substitution" rules in their conditions of carriage, and frequently use them.
      - jonny_eh 7y ago
        Plus, flights get cancelled, and passengers get re-routed last minute.
      - mopsi 7y ago
        Depends on airline. Southwest, for example, has Boeing-only fleet. JetBlue has only Airbuses and Embraers. The odds of buying a JetBlue ticket and ending up on a Boeing are fairly low compared to flying Southwest.
        frozenlettuce 7y ago
margalabargala 7y ago
A further complicating factor is that quality can be masked from the customer, and indeed will be if that's less expensive than actually improving the quality. And thus no one will actually know that Boeing's planes are of lower quality, until a couple hundred people die.
munificent 7y ago
> because the customer accepts the lower quality. This presumes a perfect market where customers are rational actors with access to a variety of sellers whose product differs only on quality, which consumers have access to accurate information about and the time and expertise to precisely evaluate. Of course the reality is we're just trying to book a flight to get home before Mom's chemo starts and all we know about each airline is the ticket price and how good the peanuts were the last time we flew on them. Airlines are about the last industry on Earth where we should expect laissez-faire capitalism to produce optimal outcomes.
- SftwrSvior81 7y ago
  I wasn't suggesting that the customers could have known beforehand that the Boeing planes had issues that would cause crashes. However, we do know NOW that Boeing planes have quality issues. If customers still willingly get on those planes, then where is the incentive for Boeing to do anything differently? That's really the point I was trying to make. We don't need perfect information to now decide to not fly on Boeing planes. That would send a very strong message to the entire industry that putting profits above customers' lives will be met with very negative consequences such as reduced or loss of profits and possibly the company going out of business.
  - inimino 7y ago
    > where is the incentive Regulation.
rightbyte 7y ago
Unless you are an aerospace engineer or pilot I don't think you can judge the quality of a plane under the surface. I note the leg space and if the plane is noisy or shakes much.
- SftwrSvior81 7y ago
  One doesn't need to be an aerospace engineer to know that Boeing planes crashed because the company leadership decided to forgo quality for the sake of profits. Before the crashes, I agree, there was no reason for customers to expect Boeing planes to be unsafe. However, now that this information has become public, any customer can decide to not fly on their planes.
  - inimino 7y ago
    Is it rational for a customer to not fly on a plane that is as safe as any other just because the same company later made another plane that was less safe? It seems like a lot to ask. In any case, even if 10% of people totally stopped flying on Boeing, which would be a wildly optimistic outcome for any organized consumer action, the airlines would just discount those flights ever so slightly and the other 90% of price-conscious consumers would immediately take up the slack. Nobody's going out of business in that scenario. This is, of course, why we rely on regulation rather than consumer choice to ensure safety, and why this is a failure of regulation, not of the market.
richardwhiuk 7y ago
This also assumes perfect knowledge, which isn't true.
ssalazar 7y ago
Nobody knew the 737 MAX was lower quality until it started falling out of the sky. I think we can agree that an ideal system wouldn't require people to die horrifically in the process of price discovery.
- SftwrSvior81 7y ago
  Absolutely, I 100% agree with this. I wasn't arguing that the current system is anything even close to ideal. I was trying to point out that now that we, the public, have paid this horrendous price, we are still not using the information gained. A company that shows that they will put profit above their customers' lives should be abandoned very quickly by its customers. That isn't happening and the fault for that lies with the customers, IMO.

ip26 7y ago

The market is just an optimizing function. Perhaps the problem is not competitive markets but rather the structure of the market, e.g. the optimization parameters & feedback loops.. For example, a common criticism of the medical market is that without accurate quotes, you cannot price compare- thus it's not a properly functioning free market with the appropriate feedback cycles, and the free market approach to fixing it would be to improve price information.

jessant 7y ago

Most people seem to prefer lower prices to higher quality. That is why airlines have responded that way.

pnathan 7y ago

> I used to think that highly competitive markets with low prices are the best, but now I am not so sure. Those kind of markets tend to push the quality down as well as squeeze the workers. I have also mostly changed my mind here. Largely because I've worked in a quality focused shop and seen the difference. But, I also appreciate that cheaper means more people can access goods and services, even if at a lower quality.

hackernewsboy 7y ago
The solution can be an arrangement with multiple tier products with different quality control and assurance.
- elliekelly 7y ago
  In some markets, yes. But in most markets there needs to be some minimum acceptable standard of QC & assurance. In the market for aluminum tubes hurling through the skies at 500 mph it's to everyone's benefit to make sure they don't come crashing to the ground. Even markets for more innocuous products/services require some minimum acceptable standard or else the race to the bottom will give us more affordable but more dangerous products: Thomas the Tank Engine ($3) vs Deluxe Thomas the Tank Engine with Lead-Free Paint ($5)
- hannasanarion 7y ago
  Which is what we already have at the consumer end of airline pricing. The economy seats on an airplane put together aren't enough to pay for the cost of fuel. Business and first class passengers are the only ones that make the airlines any money.
  - caoilte 7y ago
    Given I've regularly flown on flights where over half the plane were business/first I'm not sure that necessarily means what it seems.
    - 7y ago

linuxftw 7y ago

Free markets work. What doesn't work is absolving individual liability via corporations.

justapassenger 7y ago

Living in first world country it's easy to be biased against race to the bottom - it hurts previously very well paid jobs and breaks established status quo. But that race to the bottom made cost of flying at least order of magnitude more affordable, and as a result likely saved and improved countless numbers lives (lifting out of poverty, ability to travel for treatments, ability to see your loved ones, ability to travel for work, etc). And to put things in perspective - air travel is still safest form of travel, even accounting for MAX, and during this whole race to the bottom it was constantly improving, by orders of magnitude.

jacobolus 7y ago
> made cost of flying at least order of magnitude more affordable, and as a result likely saved and improved countless numbers lives Except for the climate change part. Continued carbon emissions threaten billions of lives. To keep our planet inhabitable current-fuel air travel must be reduced to a tiny fraction of its current scope within the next few decades (alongside many other drastic changes to transportation, industry, and electricity generation). It’s not clear that alternative power sources for air travel will be practical at large scale any time in the near future.
- MartianSquirrel 7y ago
  > Except for the climate change part. This is out of context. Same thing could be said with the advent of the internet and massive energy consumption that came with it. The debate here is about the effect the technology had on day to day human lives, not on the optimization of it afterwards.
  - jacobolus 7y ago
    Global air travel is projected to significantly increase in the future without any obvious way to sufficiently reduce its carbon footprint. The internet can be plausibly powered by low-carbon energy sources using present technology. If you uncritically define negative consequences as “out of context” then every technology can be declared to be an unalloyed good.

Symmetry 7y ago

I don't think this has anything to do with airline deregulation. The FAA has really done an excellent job of managing the various airlines and it's an example I'd point to of how regulation can work correctly in that context. Mostly that's because airlines are even more interested in preventing their competitors form cutting corners that put airline crashes in the news than they are in cutting corners themselves leading to a good sort of regulatory capture. But Boeing itself isn't one of the many airlines and is the singular US plane exporter champion. Wheras Delta, Southwest, et al want to see that the FAA isn't giving Jet Blue a pass there's mostly only Boeing to check whether Boeing is given too much of a pass and political pressure from up high is targeted at making Boeing better positioned to compete with Airbus which the FAA doesn't have jurisdiction or input from. So I think it's really a different situation.

gdubs 7y ago

Deregulated or not, the airframe business is essentially a duopoly of Boeing and Airbus.

toast0 7y ago

> I used to think that highly competitive markets with low prices are the best, but now I am not so sure. The market for air travel is highly competitive, the market for airplanes is not. In the market that the 737 serves, there's options from Boeing, Airbus, Tupolev and maybe Comac. Comac and Tupolev are deeply connected with the governments of China and Russia respectively; Airbus and Boeing are heavily subsidized by European and US government too, although more independent. There's a few more manufacturers if you include slightly smaller jets. Building high capacity passenger jets has large inherent barriers to market, but then you also see things like Bombardier being forced into partnership with Airbus when it tried to develop a new jet around the market of the 737. Long manufacturing queues and logistical difficulties of mixed fleets also make it hard for airlines to switch models or manufacturers, especially for smaller airlines.

cameldrv 7y ago
The main reason Bombardier sold the CSeries to Airbus was that it was about to be hit with big tariffs that would have made it noncompetitive in the U.S. market. Airbus has a U.S. production plant in Alabama that can do final assembly and avoid the tariffs.

wolfgke 7y ago

> I think the ultimate root cause that led to the 737 MAX crisis was de-regulation and the airlines race to the bottom on price. The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. Can't you also plausibly in a similar spirit argue for the point that the regulations about retraining pilots were responsible for the 737 MAX disaster? Otherwise Boeing would not have made such crazy engineering decisions about its design.

azernik 7y ago
The regulations here are generally sane - the retraining requirement for a new plane is an unavoidable necessity. Boeing tried to game the regulations, and because of cuts the regulator didn't have the manpower to catch them. Classic "starve the beast" - cut funding to government so it fucks up, then claim government is incompetent and so should be smaller.
- WorldMaker 7y ago
  Plus, studies by even Boeing themselves after the fact showed that retraining caught the problem, further cementing that retraining is a good thing. Had more pilots retrained specifically for the 737 MAX (rather than on older 737 simulators or test flight 737 vehicles that airlines had lying around from earlier models), a larger alarm would have been rang before problems were experienced in the wild at the worst possible time (when people's lives are endangered).
borkt 7y ago
What do you mean regulations about retraining pilots? Any time you change airframe you generally have to retrain, and it really isn't that big of a deal, just an expense. My father-in-law retrained from the MD-11 to the 777 a few years back at over 60 years old and did completely fine. The regulation to retrain on a new plane is absoloutely reaonable and it was boeing trying to pretend the MAX was similar enough to the next gen that caused the issue. In terms of inherent flight characteristics it never was similar, and no amount of software could make up for that.

vibrolax 7y ago

The civil air transport airframe business environment was brutal long before Carter and Reagan. Look at the history of Lockheed, Convair, Dehavilland, etc. in the development of passenger jets during the 50's, 60's, and early 70's. There has always been a lot of technical and economic pressure in this business.

rossdavidh 7y ago
An excellent point.

akira2501 7y ago

> I used to think that highly competitive markets with low prices are the best They probably are.. but it's probably not wise to consider a market dominated by three players as "competitive." > Maybe an oligopoly with high profits and strong unions I also don't think "more monopoly" is the sensible conclusion. > and that it is not a simple answer. Why is "more government regulation" not even a part of your consideration? The article itself even hints at this, before deregulation a company like Boeing could exist and be profitable, but after deregulation it becomes beholdant to Wall Street. It seems pretty clear what the solution is.

kapuasuite 7y ago
Regulation and price controls aren’t the same thing, which you seem to be implying.
- pjscott 7y ago
  Most regulations aren't price controls, but the historical regulations being discussed here are. In the US, routes and prices used to be decided by the Civil Aeronautics Board, removing price competition between airlines. After the price controls were dropped, air travel became a lot more affordable and profit margins got smaller. "Airline deregulation," in a US context, refers to this. (The terminology is a bit unfortunate, but we're stuck with it for now.)

cameldrv 7y ago

The 737MAX was still safer than air travel in the 1970s. Boeing definitely screwed up, but it's a mistake to overstate how dangerous it really is. It's still far safer than driving. Air safety has advanced to a point where we're capable of having almost zero fatal accidents, which IMO leads us to overemphasize each one that still happens. Ultimately, the airlines wanted a common TC and type rating for very good reasons -- it saves money, i.e. human effort in pilot training, the number of pilots that need to be on reserve, maintenance training and staffing, spare parts inventory, etc. These are all laudable goals, and to simply say that Boeing should have designed a new plane is too simplistic. The real problem IMO was the contracts Boeing signed with very high penalties for delivering late or having any additional training whatsoever. This didn't give the engineers enough flexibility or time to design a safe augmentation system, especially after the discovery during test flights that the pitch instability was worse than expected. That led to a quick patch-up job that totally compromised the redundancy of MCAS. It's also clear in hindsight that the FAA handed too much authority to Boeing on the certification side, and that they should have been scrutinizing their safety analyses more. That is clearly happening now, to Boeing's consternation.

Arn_Thor 7y ago
I'm not sure how those figures shake out, so if you could provide a source that would be terrific. Deaths per unit of distance flown for the 737MAX vs a comparable 70s plane. And still, even if that is the case, the anger stems from the fact that corners seemed to have been cut and warnings ignored. In other words this was not some unforeseen event that was unavoidable. It was in fact avoidable
- cameldrv 7y ago
  According to Wikipedia, the 737MAX flew 500,000 flights before it was grounded. According to this: https://randy.newairplane.com/2018/05/22/737-max-a-year-of-serving-the-globe/ https://randy.newairplane.com/2018/05/22/737-max-a-year-of-s... The average 737MAX flight was about 3 hours. Typically 3 flight hours is about 1250 miles, so the 737MAX flew about 625 million miles, for about 3 fatalities per billion passenger miles. Here's the best data I could find from the U.S.: https://www.researchgate.net/publication/229020495_Aviation_Deregulation_and_Safety_in_the_United_States_Evidence_After_Twenty_Years/figures?lo=1 https://www.researchgate.net/publication/229020495_Aviation_... It looks like the U.S. in the 1970s had about 1 fatality per billion passenger miles. To get to 3 per billion, you have to go back to the early-mid 60s. I wasn't able to get worldwide data, but generally the rest of the world has lagged behind the U.S. by a factor of at least 3x. Cars are about 7 per billion passenger miles (https://www.reddit.com/r/urbanplanning/comments/bw0msc/passenger_fatalities_per_billion_passenger_miles/ https://www.reddit.com/r/urbanplanning/comments/bw0msc/passe...)

narrator 7y ago

I know this is Hacker News and we like to blame politicians or rich non-engineers, but isn't the 737-Max case a case of very bad engineering that they could have done better? Maybe management had a hand in that, but the final outcome is the engineering was terrible and it's not simply the fault of deregulation in the 80s.

rossdavidh 7y ago
I think part of that is, had there been different engineers there, it is not so clear that the outcome would have been different, but with different management decisions (e.g. whether to make a new plane or try to pretend it was still the 737) things could have been different. Was the MCAS a lone example of rushed, poorly tested work done by people without enough knowledge of the industry they were working for? Or is it just the first one to come to light, because the MCAS caused the plane to be grounded before any others did? We don't know, but my guess is, based on the other news coming out about the 737MAX since it was grounded, that there are other issues like this lurking. This tends to suggest that the problem is cultural, and the corporate culture is one of the primary responsibilities of the people in command.
ananonymoususer 7y ago
Muilenburg is to blame. He got the stock price up by getting rid of all of the more experienced (older) higher paid engineers who knew to not make the sort of mistakes that were made on the 737-Max. I was a happy 35+ year Boeing employee who would have stayed where I was for maybe another ten years, but Muilenburg made my choice to retire very easy by changing the terms of the (retirement) plan to give me a compelling reason to leave. If I had stayed, I would have effectively taken a pay cut of about 20% because of the reductions to my defined benefit payout. Instead, I found a better job elsewhere for a 20% raise and took the early retirement.
rkangel 7y ago
To do good engineering, you need good engineers and you need a culture of good engineering. You need an organisation and incentives that encourage doing things well. Looking at it through a software lens - even if you do have the best people, if your project structure squeezes development time, rather than producing solid code and catching all the bugs early, you'll produce flaky code that will produce surprises down the line. Then on top of that, such will lose some of its best engineers (because they get frustrated) and probably won't attract new good ones because they don't value them sufficiently to pay them enough.

Vervious 7y ago

A competitive market should improve the quality of planes: no one should buy a Boeing if there is a viable alternative. Allowing the merger reduced competition. We really shouldn't blame deregulation (in the sense of reducing the barrier of entry to airline markets). Lower airline ticket prices (Europe is a case in point) is better for everyone. And if quality were indeed lower, then another company should be able to swoop in and capture a higher tier quality market if there are people willing to pay for it (like first class, or business class) Lack of anti-trust enforcement in the aerospace manufacturing industry is entirely orthogonal and hurts plane safety.

rhizome 7y ago

>The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. I thought it was to avoid FAA airworthiness recertification.

epx 7y ago

No, this other extreme is not desirable either.

pjscott 7y ago

Air travel is so much safer than traveling by car that anything you can do to bring down its price is probably a big safety win -- including corner-cutting on airplane safety.

whermans 7y ago

The free market can work - if certain safeguards are in place to ensure the race to the bottom doesn't negatively impact either the safety and suitability of the products and services produced, or the wages and benefits paid to workers. Remove those and you end up with misery.

carlmr 7y ago

>The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. If you ask me this is a problem in every highly regulated industry. You often find that the regulations have exceptions for smaller changes. What then happens is that you have many tiny changes that are made to fly under the radar, because it's unduly expensive to recertify after a big change. This makes it impossible to do big changes that are necessary to get rid of technical debt. Since it's impossible to get management approval for these. And technical debt keeps on building up. If the incentives were more continuous (not sure how this is possible), instead of abruptly changing (no training <-> full training dichotomy), then we would see fewer of these cases. So cases like this become a question of certain cost vs. risky reward (cheating or other hacky solutions). And if you've already invested in a few hacky solutions and not been caught, then the incremental risk seems to go lower, while the abrupt cost change stays the same. It also goes hand in hand with the normalization of deviance (https://danluu.com/wat/ https://danluu.com/wat/). If everything you've done for the last 60 years is incrementally adding hacks to the 737, then the one on the 737 MAX doesn't seem crazy anymore.

Arn_Thor 7y ago
I think part of the problem is the focus on the financial figures for the next shareholder call. With a significantly longer time horizon it would be easy to justify investment in a total redesign, because it would lead to a number of cost savings down the line as technical debt was eliminated. And all for the low, low price of one comprehensive new government approval. Instead it seems the goal was to get a moderately viable product to market as fast as possible, and the fastest and cheapest way was force some changes and fly under the regulators' radar. That's at least one alternative perspective worth considering.
kd5bjo 7y ago
> If you ask me this is a problem in every highly regulated industry. You often find that the regulations have exceptions for smaller changes. Another example of this is getting planning permission to build a house. Renovations are generally easier to get approved than new construction and keep any variances that have already been granted, so you’ll occasionally see someone “renovate” a house by tearing down everyrhing except for a single wall and building completely new otherwise.

CaptainZapp 7y ago

I think the ultimate root cause that led to the 737 MAX crisis was de-regulation and the airlines race to the bottom on price. The whole reason for making the plane a 737 and not a new aircraft was to cut pilot re-training costs. No! That's shifting the blame away from those that engineered and built that death trap. Which is the Boeing Corporation. If airlines demand features, which are just not feasible to provide at the price range they're willing to pay then it's the plane makers responsibility not to provide such planes. Period! The core issue (apart from what happened much earlier, after McDonnel's reverse take over) was not the fact that airlines were trying to drive the price down, but that Boeing didn't have a competing product in the most critical market and wouldn't have one for a decade if they engineered a modern plane. So they hacked an ancient 60th design to modern standards and shunned, demoted or simply fired engineers, which dared to raise concerns. Having the FAA in their pockets and spending tons of cash on lobbying instead of investing it into the construction of good reliable planes also didn't help. This one's on Boeing. Not on airlines and certainly not on pilots. It's on The Boeing Comnpany; period! And what galls me most is that the only entity, which was in a position to know what was wrong after the first crash did everything in it's power to blame, befuddle, obstruct and deflect from the real cause. MCAS, which wasn't even documented in the manuals at that time. In that sense the second crash is corporate mass murder for profit and I really hope that C level people go to jail for that one (alas, I doubt it).

ptah 7y ago

> highly competitive markets with low prices are the best in some cases yes, in others no. use the right tool for the job

nickbauman 7y ago

High competitive / low prices marketeering at best gives you Walmart: where none of the products are very good, false values products are vaunted (the one gallon pickle jar for $4.99) and nobody is especially enthused about what's on offer. At worst you get things like the gig economy.

geofft 7y ago

Free, deregulated markets work well when the market participants have high information about what's in the market. If you're interested in buying, say, books, there's not much need to regulate what's in the books - customers have a pretty good idea, they can page through the book at the bookstore, and they can read what reviewers say. Customers don't have any idea about which airline is safer. Airlines rarely have an idea of which airline is safer - shortcuts taken in manufacturing might lead to problems 20 years down the line when no human who was involved in the engineering or purchasing work is still at either company.

mgoetzke 7y ago

Free markets push everything to the level of just bearable. Bad, but not quite bad enough not to use a service you rely on. Seats are tight, just not tight enough to make people in general seriously consider to not fly because of that. Food is bad, just not bad enough for people not to eat it.