Boeing faces scrutiny again on quality control

Release time:2024-01-09 Publisher:South Asia Development

After midair incident on Alaska Airlines MAX jet, aircraft maker under new glare

An incident involving a midair breach in the fuselage of an Alaska Airlines Boeing 737 MAX 9 jet has again put the spotlight on Boeing's manufacturing quality.

The US Federal Aviation Administration (FAA) is looking at Boeing's production process and supply chain to pinpoint what might have caused a metal panel to fling off the side of the Alaska Airlines flight at 16,000 feet on Friday evening. Late on Sunday, the panel was found in the backyard of a schoolteacher in Portland, Oregon.

United Airlines announced Monday that it found loose bolts on its Boeing 737 MAX jet. United has 79 of the MAX 9 planes in its fleet, and is the biggest operator of the jet model.

The FAA on Saturday grounded dozens of 737 MAX 9 planes after the Alaska Airlines panel blew out, calling for inspections.

United has 79 of the MAX 9 planes in its fleet and is the biggest operator of the jet model.

"This sort of failure should not happen on any airplane, but for it to happen on a 3-month-old aircraft is unacceptable," Nick Cunningham, an analyst at Agency Partners, told the BBC of the Alaska Airlines jet. "This adds to the impression that Boeing has forgotten how to build aircraft."

The incident Friday resulted in no serious injuries but led to the FAA grounding about 171 jets, pending inspection. Boeing said it supported the decision and that safety remained its "top priority".

Other than finding the cause of the midair incident, industry observers say Boeing needs to reassure customers and investors that the problem is contained.

The 737 MAX is Boeing's best-selling aircraft, with more than 4,000 orders to fill. However, the more common MAX 8, which isn't affected by the grounding, makes up most of those orders.

The Alaska Airlines incident is just the latest production lapse at Boeing, and it couldn't have come at a worse time.

Boeing is battling Europe's Airbus for orders, and both have been trying to rapidly recover their manufacturing capacity after slashing production over the pandemic.

Boeing is trying to increase the rate at which it builds the MAX, because like other airplane manufacturers, it isn't paid until delivery of a plane.

It currently builds 38 jets a month at one of its factories near Seattle and has said it plans to reach 50 a month by the middle of the decade.

The latest incident "begs the question how is the quality control going as they try to ramp up?" said Bank of America analyst Ron Epstein.

Boeing's shares have risen more than 18 percent over the past 12 months. But on Monday, they fell 8 percent, dropping $20 to $229 a share. Boeing is a component of the Dow Jones Industrial Average.

Boeing's most recent issue "does not come as a complete surprise to us'', said Christopher Raite and Peter McNally, analysts at global research firm Third Bridge. "Since the onset of the pandemic, there has been an acute shortage of highly skilled laborers, which can be viewed as a key driver for the myriad of recent issues."

Boeing has faced production problems since a design flaw triggered two deadly plane crashes and led to a worldwide grounding of the 737 MAX in 2019.

Last month, Boeing asked airlines to check for loose bolts on the system controlling the MAX's rudder, while improperly drilled holes and improper fittings were found on some jets earlier in 2023.

Boeing suffered from supply chain shortages in 2022. Starting in 2020, a series of issues on the 787 led to 20 months of delivery delays.

In October 2023, Boeing reported another $482 million in red ink on the contract to retrofit two new Air Force One US presidential 747 jets. Boeing has now lost more than $1 billion on each of the two jets.

CEO Dave Calhoun said last year that Boeing should have never agreed to the fixed $3.9 billion price tag.

The Alaska Airlines incident also drew in Spirit AeroSystems, a key Boeing supplier, which installs the plugged doors as part of the construction of the 737 MAX fuselages.

China is an important market for Boeing. In December 2023, Boeing made its first direct delivery of a 787 Dreamliner to China since 2019, a step that industry watchers said could hasten the end of China's freeze on deliveries of Boeing's profit-making 737 MAX since the 2019 grounding.

But Scott Hamilton, head of consultancy and news site Leeham News, said, "Anything could cause Beijing to change its mind."