"Boeing is issuing a display system software update, to implement the AOA Disagree alert as a standard, standalone feature before the MAX returns to service".
But the statement released on Sunday described a troubling timeline that shows how long some at the company were aware of the problem before finally deciding to act.
Boeing engineers discovered this problem in 2017, but conducted an internal review and concluded that the dummy alarm "did not adversely impact airplane safety or operation".
It was not clear if the defect caused an Ethiopian airplane to crash in March, killing 346 people. In both cases, investigators have blamed incorrect "angle of attack" (AOA) sensor data for pitching the planes downwards to their doom. The feature is supposed to warn pilots when two angle-of-attack sensors provide conflicting information about the relation of the plane's nose to the oncoming air stream.
A spokesman for the US Federal Aviation Administration (FAA) said the agency was first notified of the non-working warning light in November, after the Lion Air 737 MAX crashed in Indonesia.
Boeing had identified the issue 12 months before the Lion Air crash.
Boeing is also developing a software upgrade and training changes to the 737 MAX that must be approved by global regulators before the jets can fly again.
The company's recent statement on the AOA (which stands for an angle of attack) Disagree alert on 737 MAX planes has revealed that Boeing's engineers found out in 2017 that the plane's display system software did not meet requirements, just several months after the manufacturer started delivering the jets in question. That allowed the airline to activate the sensor-disagree warning lights on its 34 Max jets earlier this year, she said. However, Boeing's timely or earlier communication with the operators would have helped to reduce or eliminate possible confusion.
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The Ethiopian pilots, who after the previous crash would have been keenly aware of MCAS, seem to have realized that system was the problem reasonably quickly and tried to follow Boeing's recommended checklist of procedures to handle it, though they still were not able to control the plane. Boeing told airlines that the warning light was standard equipment on all Max jets.
Tajer said the American pilots were told in the meeting that on the flight deck of their 737 MAXs, the AOA disagree light would have lit up on the ground and so, because that's a "no-go item", the plane wouldn't even have taken off.
The 737 Max, the fastest-selling plane in Boeing's history, has been grounded around the world for nearly eight weeks.
The statement is the first time Boeing has explicitly admitted to issues in the production of the 737 Max, but the firm maintains it did not affect plane safety.
Boeing blamed the error on software provided to the company by an outside source, though did not give further details.
"Boeing's battle to get the 737 Max back in the air is becoming harder with all these new revelations, restoring credibility to the public is going to be harder", he told AFP.
It, however, ruled that absence of AOA indicator didn't pose any safety threats and it was an option system update.