Boeing Faces Uncertainty and Costs After Harrowing Incident
After two deadly crashes involving its best-selling 737 Max 8 planes five years ago, Boeing spent billions of dollars to make its products safer and repair its reputation. However, the company is once again facing uncertainty and costs after a harrowing incident involving a different 737 jet. The incident occurred during an Alaska Airlines flight when a hole blew open on a 737 Max 9 jetliner shortly after takeoff. The pilots made an emergency landing, prompting the Federal Aviation Administration to indefinitely halt Boeing’s plans to raise production of Max planes. Passengers have filed class-action lawsuits against the company, and airline executives have publicly criticized and expressed doubt about Boeing’s ability to deliver planes on time. United Airlines’ chief executive has even suggested cancelling some of their orders with the company.
In addition to the Alaska incident, a supplier found a new problem with fuselages on dozens of unfinished 737 Max planes. This discovery will force the company to rework about 50 planes, further delaying their delivery. The delays could lead to lower profits or bigger losses for Boeing, which reported a loss of $2.2 billion last year.
The uncertainty surrounding Boeing has led the company’s executives to decline to provide a financial forecast for this year. Shares of Boeing have fallen about 16 percent since the Alaska incident. Industry analysts have expressed concerns that Boeing could lose more market share to competitors and that the increased scrutiny on the Max could also affect another Boeing model, the 777X.
In his opinion, Richard Aboulafia, a managing director at AeroDynamic Advisory, is concerned that Boeing is not doing enough to fix its challenges. He noted that there is only one uncertainty, which is whether or not Boeing will change to avoid irrelevance and possibly worse. This sentiment underscores the critical nature of the challenges facing Boeing and the potential impact on the company’s future.