Boeing Shares Plummet After Report That Company Representative Unknowingly Lied to FAA

Boeing shares plummeted sharply on Friday afternoon after Reuters reported that a former company employee said he unknowingly lied to the Federal Aviation Administration.

Stocks closed the day down 6.79 percent after the Reuters report, which represented the latest setback to befall the company since it grounded its 737 Max in March after following two fatal crashes, which killed 346 people.

The instant messages raise questions about whether the company was dishonest with federal officials. Boeing said it had uncovered the messages months ago but the FAA told Reuters that it was notified of the communications on Thursday.

In the messages obtained by Reuters, the airline's former chief technical pilot, Mark Forkner, describes problems with the MCAS system, which was linked to both deadly crashes of the 737 Max 8 plane. The system was designed to ensure the 737 Max 8 did not ascend in a way that would cause the plane's engines to stall. But it pulled the nose of the plane down, and in both fatal crashes, the aircraft were forced into an unstoppable nosedive by a single sensor deployed by the plane.

"It's running rampant in the sim," Forkner wrote in a 2016 message, referring to the simulator. "Granted, I suck at flying, but even this was egregious."

Forkner also said that he unknowingly lied to the FAA. "I basically lied to the regulators (unknowingly)," he wrote.

His colleague responded, "it wasn't a lie, no one told us that was the case" of an issue with the MCAS.

According to Reuters, the messages led agency administrator Steve Dickson sent a letter to Boeing CEO Dennis Muilenburg to demand an "immediate" explanation from the aerospace company. Boeing told The New York Times that it was "voluntarily cooperating" with the Congressional investigation into the 737 Max.

In a meeting a month-and-a-half after the second crash, Muilenberg sought to reassure shareholders that "safety is our top priority," and the company had not rushed the 737 Max to market. Scrutiny has since mounted. Muilenburg was removed from his position as chairman last week to focus on dealing with the fall-out from the 737 Max crashes.

The FAA has also faced criticism, and a report released last week said that the agency did not review the MCAS system properly.

The Office of Special Counsel, an independent investigative agency, said last month that federal safety inspectors involved with the training requirements for the 737 Max were themselves under-qualified and had not completed formal training.

Earlier this month, the Southwest Airlines Pilots Association sued Boeing for $100 million in lost income. The suit, filed in federal court, says the company "withheld critical information from regulators and deliberately mislead its customers, pilots and the public and the true scope of the design changes to the 737 Max."

Though Boeing said that it expects the FAA to approve 737 Max flights in the 4th quarter, the agency has not yet done so. United Airlines and Southwest Airlines removed the 737 Max flights from their schedules until early 2020.