It could have been worse. The blown-out fuselage of the Alaska Airlines Boeing 737 Max 9 at 15,000 feet after take off in Oregon on January 5th, could have caused more harm if it had depressurized at a higher altitude.
The Boeing 737 Max 9 accounts for around 15pc of all 737 Max aircraft in service and an even smaller portion of unfilled orders. Just six airlines are mainly affected by the groundings, none of them in Europe, and Alaska and United bear the brunt of the impact.
The blessings are easily counted. A week after the event, the exact cause of the malfunction is still unknown, but regulators worldwide have grounded all max 9s with the same door plug for inspections.
Investors dropped the price of Boeing’s market value by 8pc drop and that of of Spirit AeroSystems by 11pc, a spin off responsible for Boeing fuselage manufacture and maintenance since 2005.
Preliminary examinations at United Airlines reveal further problems ahead, with “installation issues” with the door, suggesting a pattern of poor workmanship at Spirit AeroSystems, which should have been better overseen by Boeing.
Shoddy workmanship is only part of the problem. The incident with the max 9’s blown-out fuselage enhances the growing perception that Boeing has lost its direction, prioritising share holders over safety.
The fall of the house of Boeing came in two shocks. In five months after October 2018 when two 737 Max crashes in Indonesia and Ethiopia, linked to flight-control software issues, resulted in a 20-month grounding of the entire 737 Max fleet.
The company paid approximately $20bn in fines and compensation, with critics claiming that Boeing prioritized financial returns over engineering.
Dave Calhoun became the CEO in 2020 with the task of restoring Boeing’s technical excellence and reputation.
Boeing faced further challenges, including suspensions in deliveries of the 787 Dreamliner due to quality-control problems and the need for fixes on vertical stabilizers and pressurized cabin issues on the 737 Maxes assembled by Spirit AeroSystems.
These manufacturing issues have caused delays, such as the start of deliveries for the Boeing 777x being pushed back to 2025, six years behind schedule, resulting in additional costs of at least $8bn for the company.
Boeing has not achieved an annual profit since 2018 and lags behind its European competitor, Airbus, in orders for short-haul jets by 4,800 to 7,300.
The company is facing challenges in rehiring skilled workers laid off during the COVID-19 pandemic as it aims to increase production of the 737 Max from 38 to 50 aircraft per month by 2025-26. Boeing supply is currently just 52pc of 2018 levels, when they delivered 806 aircraft. Last year they delivered 528, of which 396 ere Boeing 737 Max. Ryanair CEO Michael O’Leary reckons he will be short ten of the 58b aircraft he requires to be delivered before the start of summer 2024.
While some of the challenges faced by CEO Dave Calhoun were beyond his control, such as the impact of the COVID-19 pandemic on the industry, Boeing’s stock has significantly declined compared to Airbus.
In order for Boeing to regain its success, significant efforts are needed.
The recent door drama with the blown-out fuselage on the Alaska Airlines Boeing 737 Max 9 adds to the incomplete task of salvaging Boeing’s image under Calhoun’s leadership.
The incident over Oregon will require Boeing to improve its production processes, adding further costs. Talk about jet lag.
