Boeing, the aerospace giant, finds itself in a precarious position as several of its largest airline customers are reconsidering their expansion plans and aircraft orders due to the company’s ongoing quality control issues. The situation underscores the far-reaching consequences of Boeing’s struggles and the potential for significant financial implications.
At the forefront of this reevaluation is Southwest Airlines, a longtime Boeing loyalist known for operating an all-Boeing 737 fleet. The airline has taken the drastic step of trimming its 2024 capacity forecast and is actively reassessing its financial guidance for the year. This decision comes in response to receiving fewer Boeing 737 Max deliveries than initially expected—a mere 46 planes compared to the anticipated 79. Southwest’s CEO, Bob Jordan, did not mince words, stating bluntly, “Boeing needs to become a better company, and the deliveries will follow that.”
Similarly, Alaska Airlines has cited the “uncertainty around the timing of aircraft deliveries” stemming from the intensified scrutiny Boeing faces from regulatory bodies like the Federal Aviation Administration (FAA) and the Department of Justice. This uncertainty has forced Alaska Airlines to leave its 2024 capacity estimates in flux, unable to make concrete plans due to the unpredictable nature of Boeing’s delivery schedule.
United Airlines, another major player in the aviation industry, has taken an even more decisive step. The airline has requested that Boeing halt production of the Max 10 model, an aircraft that has yet to receive certification from the FAA, and instead prioritize the production of Max 9 planes, which are currently operational. United’s CEO, Scott Kirby, expressed frustration with the situation, stating, “It’s impossible to say when the Max 10 is going to get certified.” Kirby had previously warned that the airline would build a fleet plan without the Max 10 due to the persistent delays in its certification process.
The frustration among airline executives has been mounting in recent months, fueled by Boeing’s latest crisis involving a door panel that blew out mid-flight on an Alaska Airlines Max 9 aircraft in January. This incident intensified scrutiny on Boeing, with a preliminary investigation by the National Transportation Safety Board revealing that bolts on the door panel did not appear to be properly attached when the planes left Boeing’s factory in Washington State. If you want, you can also read- FAA Review Urges Major Overhaul.
In response to the mounting pressure, Boeing has issued statements acknowledging the need for improvements. The company said it is “squarely focused on implementing changes to strengthen quality across our production system and taking the necessary time to deliver high-quality airplanes that meet all regulatory requirements.” Boeing also claimed to be in close contact with its valued customers regarding these issues and the actions being taken to address them.
However, the FAA has taken concrete steps to address the quality control concerns, halting Boeing’s planned output increases and citing a recent audit that “identified non-compliance issues in Boeing’s manufacturing process control, parts handling and storage, and product control.”
Boeing’s CEO, Dave Calhoun, and other leaders have vowed to stamp out the quality control problems plaguing the company. They have been holding a series of work pauses to discuss issues with workers and have emphasized the importance of adherence to manufacturing procedures and processes. In a note to staff, Stan Deal, CEO of Boeing’s commercial airplane unit, stressed the need for employees to “precisely follow every step of our manufacturing procedures and processes” and encouraged them to report potential safety hazards through proper channels.
As Boeing grapples with these challenges, its largest customers are left with no choice but to reevaluate their growth strategies and aircraft orders. The repercussions of Boeing’s quality control lapses have proven to be far-reaching, with major airlines forced to adjust their plans and financial projections, potentially leading to significant financial consequences for all parties involved.
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