Boeing under pressure to shift focus and start recovery
▶ Company must tighten quality controls and rebuild trust with regulators, airlines and travellers, analysts say
Boeing’s recovery from recent high-profile safety lapses will take years as the plane manufacturer seeks to rebuild its reputation, analysts have said.
The US company must become focused on quality control, improving safety checks and design, investing more heavily in training, overhauling its corporate culture and ensuring stricter supervision, they said.
It follows two incidents last month, the most serious of which came on January 5 when a door panel flew off an Alaska Airlines 737 Max 9 jet mid-flight.
Then, on January 20, the nose wheel of a Delta Air Lines Boeing 757 fell off and rolled away as it lined up for take-off.
“For Boeing, the journey ahead involves not just addressing the technical and regulatory challenges but also winning back the heart and trust of the flying public through consistent, transparent and safety-first practices,” Linus Bauer, founder and managing director of consultants BAA and Partners, told The National.
The door panel incident has become the biggest crisis for Boeing since the entire fleet of its Max jets was grounded in 2019 after two deadly crashes.
The US National Transportation Safety Board in its preliminary report last week showed that the panel appeared to have left the Boeing factory without four bolts to hold it in place.
Following the report, Boeing’s president and chief executive Dave Calhoun said: “Whatever final conclusions are reached, Boeing is accountable.”
The panel incident is a quality, safety and reputational crisis for Boeing. The US Federal Aviation Authority has barred it from boosting 737 Max production, pending quality control improvements. Analysts say Boeing must shift focus from making money to products, performance and people to halt the downward spiral.
“There is a perception that Boeing lost focus on its engineering prowess and excellence,” aviation consultant John Strickland told The National. “The move of headquarters to Chicago divorced corporate management from production and day-to-day production in Seattle.”
Boeing’s recovery from the near-disaster incident of a door panel flying off a 737 Max 9 jet mid-flight will take years as the US plane manufacturer seeks to rebuild its reputation, regain the confidence of regulators and airlines, and put an end to its production glitches.
The company must become laser-focused on tightening quality control, improving safety checks and design, investing more heavily in training, overhauling its corporate culture and ensuring stricter supervision, analysts say.
“The challenges Boeing faces are not insurmountable, but the path to recovery is a marathon, not a sprint. It involves fundamental changes in corporate culture, design philosophy and operational transparency,” Linus Bauer, founder and managing director of consultants BAA & Partners, told The National.
“For Boeing, the journey ahead involves not just addressing the technical and regulatory challenges but also winning back the heart and trust of the flying public through consistent, transparent and safety-first practices.”
The Arlington, Virginia-based company’s actions in the coming years will be “critical in shaping its legacy and its role in the future of aviation”, Mr Bauer said.
This will be no mean feat and Boeing has its work cut out amid heightened scrutiny of its manufacturing and inspection processes from regulators, airline customers, lawmakers and investigators. Last month, a Delta Air Lines Boeing 757 passenger plane’s nose wheel fell off and rolled away as the jet lined up for take-off.
“The only thing Boeing can do is build better quality, which means zero defects on every product going through the factory,” George Ferguson, senior aerospace analyst at Bloomberg Intelligence, told The National. “Unfortunately, I don’t see a shortcut to this. It will be built slowly over months and years of no further problems.”
The Alaska Airlines incident last month has become the biggest crisis for Boeing since the entire global fleet of its Max jets was grounded in 2019 following two fatal crashes.
The US National Transportation Safety Board in its preliminary report last week into the January 5 incident showed that the door panel appears to have left the Boeing factory without four bolts designed to hold it in place.
Reacting to the report, Boeing’s president and chief executive Dave Calhoun said “an event like this must not happen on an aircraft that leaves our factory”.
“Whatever final conclusions are reached, Boeing is accountable for what happened,” he said. “We simply must do better for our customers and their passengers.”
The company is implementing a “comprehensive plan” to strengthen quality and the confidence of its stakeholders and is squarely focused on taking “significant, demonstrated action and transparency at every turn”, he said.
The 737 Max 9 incident has become a full-blown quality, safety and reputational crisis for Boeing that will slow plane production as the US Federal Aviation Authority (FAA) has barred the plane maker from boosting the existing 737 Max production rate, pending improvements in quality control.
Last week, a poll from the Associated Press-NORC Centre for Public Affairs Research showed that only about 20 per cent in the US are confident in the work that federal agencies, commercial airlines or plane makers do to uphold air travel safety.
The nationwide poll was conducted between January 25 and January 29.
A poll last month by YouGov and The Economist found that 29 per cent of Americans positively rated the safety record of the Boeing 737 Max 9, while 32 per cent rated it negatively.
Another 40 per cent said they did not know.
About 48 per cent of the US respondents said that it is very important or somewhat important for them to know the model of the Boeing or Airbus airliner they will be flying in, the survey showed.
More Americans feel good about airline safety in general than about the Boeing 737 Max 9’s safety, with 82 per cent of those surveyed positively rating the safety record of commercial airline travel.
About 47 per cent of those surveyed said they feel safer to fly rather than drive on a long-haul trip.
Aviation industry analysts say Boeing must shift its attention from making money to focusing on products, performance and people in to halt the company’s downward spiral over the past few years.
“There is a perception that Boeing lost focus on its engineering prowess and excellence. The move of headquarters to Chicago divorced corporate management from production and day-to-day production in Seattle,” aviation consultant John Strickland told The National.
“Boeing has to restore confidence by returning to the core values of producing safe and reliable products.”
Boeing said it has taken immediate action to strengthen quality, implementing a control plan to ensure all 737 Max 9 mid-exit door plugs are installed according to specifications.
It is also implementing plans to improve overall quality and stability across the 737 production system, it said.
This includes additional inspections further into the supply chain and launching an independent assessment to bolster the quality management system at the Boeing Commercial planes unit by an experienced safety expert.
The company also said it is opening its factory to 737 airline customers to conduct their own additional reviews.
Industry experts say the aviation industry will have to put quality control at the top of its priorities in the wake of the 737 Max 9 incident.
“I expect that as the FAA inspects suppliers and undertakes a manufacturing review, we’ll see more inspectors at more of the supply base,” Mr Ferguson said.
“There may be some onshoring and consolidation too if the FAA determines they can’t appropriately inspect part of the supply base or the subcontractor is too risky.”
There will be broad implications for the aviation industry that include a re-evaluation of regulatory frameworks, a push towards more resilient and diversified supply chains, and an increased emphasis on safety, according to Mr Bauer.
“Both manufacturers and suppliers will face more stringent regulations and oversight, leading to increased compliance costs and potentially longer development timelines.”
This will drive companies to invest in more advanced safety features and technologies.
“Suppliers will face tighter scrutiny and higher standards from manufacturers seeking to avoid quality control issues, which could lead to consolidation in the supply chain,” Mr Bauer added.
Boeing’s latest crisis risks it ceding further market share to European rival Airbus, according to some analysts.
“Airbus stands to benefit from Boeing’s setbacks by capturing market share, strengthening industry relationships, and bolstering innovation and product development,” Mr Bauer said.
“Investing in new technologies and aircraft could position Airbus favourably as the industry moves towards recovery and future growth.”
However, other analysts believe that the nature of the duopoly between the two main plane makers in the market limits options for airlines.
“Airbus cannot directly exploit Boeing’s predicament – its order books are pretty full – though it can gain some possible customer switches over time,” Mr Strickland said.
It will be challenging for Airbus to benefit significantly from its rival’s woes, given the European plane maker’s backlog is long and they are also facing supply chain bottlenecks, so it will probably stick to its current plan for production rate increases, Mr Ferguson said.
“Provided Boeing gets quality in hand over the next six months or so, I believe an airline that wants aeroplanes in the next five or six years will need to go to Boeing,” he said.
“So the duopoly nature of the industry and the somewhat overlapping supply chain prevents a breakout from Airbus.”
The only thing Boeing can do is build better quality, which means zero defects on every product going through the factory
GEORGE FERGUSON Bloomberg’s senior aerospace analyst