As the 737 MAX’s go-around gradually made progress, Boeing suffered another heavy blow. Within a week, several Boeing plane accidents occurred in many places around the world. At the same time, a series of investigations and accountability have also begun. For Boeing, its quality control management, safety production and other issues need to be solved urgently. However, the US regulatory requirements for the 737 MAX series aircraft to stop expanding production have disrupted Boeing’s capacity delivery plan and also affected Boeing’s performance this year and even in the longer term.
The problem is "a laundry list"
Shortly after the door fell off, the Boeing plane was involved in the storm again. According to Xinhua News Agency, a Boeing 787-9 passenger plane of Latham Airlines had technical problems on the way from Sydney, Australia to Auckland, New Zealand on the 11th, and its fuselage shook violently, causing about 50 people on board to be injured.
Latham Airlines said in a statement that the passenger plane LA800 on the Sydney-Auckland route "had technical problems during the flight, and its fuselage shook violently". The passenger plane landed at Auckland airport that afternoon, and "some passengers and crew members were evaluated or treated by medical staff at the airport".
This is the fourth accident involving Boeing aircraft in the past week. On the 8th local time, a Boeing 737 passenger plane skidded off the runway when landing in Texas, USA. Fortunately, no casualties were caused. At the time of the incident, there were 160 passengers and 6 crew members on the plane.
On the 7th, a Boeing 777-200 passenger plane of United Airlines flying from San Francisco to Osaka, Japan, lost a tire during take-off, which caused damage to many cars in the ground parking lot and temporarily closed a runway at the airport. On the 4th, one of the engines of a United Airlines Boeing 737 flying from Houston to Fort Myers caught fire, and the passenger plane was forced to return.
After a series of flight accidents this year, Boeing is facing the scrutiny of passengers and regulators, the most striking of which is that the door of a brand-new 737 MAX 9 passenger plane of Alaska Airlines fell off in mid-air in January. At that time, it caused a big wave of public opinion, and the Ministry of Justice also launched a criminal investigation.
After the accident, airlines around the world temporarily stopped the flight of MAX 9, and the Federal Aviation Administration (FAA) ordered the temporary grounding of 171 aircraft for inspection. Alaska Airlines and United Airlines both expressed disappointment with the quality of Boeing’s aircraft, or will consider other aircraft purchase plans in the future.
Because of these accidents, the Ministry of Justice and FAA initiated joint criminal charges against it, and Boeing spent $2.5 billion to reach a settlement. Since the end of December last year, Boeing’s share price has fallen by about 24%, the biggest decline in the past two years.
Safety culture defect
For the "falling door" incident in January this year, the investigators of the US Department of Justice have contacted some passengers and crew members who were on this passenger plane at that time. This investigation will help the Ministry of Justice to assess whether Boeing has complied with a previous settlement agreement with it.
The settlement agreement concerns the investigation of two fatal air crashes. In October 2018 and March 2019, Indonesian Lion Airlines and Ethiopian Airlines crashed respectively, killing a total of 346 people. The crashed planes were all MAX 8 passenger planes. In January 2021, the U.S. Department of Justice filed a criminal lawsuit against Boeing, and the two sides reached an agreement to postpone the prosecution. Boeing agreed to pay more than $2.5 billion in fines and compensation, and promised to fully cooperate with government requirements and implement compliance and improvement plans.
The deferred prosecution agreement expired on January 7th this year, and the passenger plane Mense fell two days before the agreement expired. According to the agreement, it is still possible for the Ministry of Justice to continue to push forward relevant lawsuits against Boeing. Alaska Airlines issued a statement on the 9th, saying that it is a "normal" operation for the Ministry of Justice to launch an investigation on such accidents, and the company will fully cooperate and believe that it is not the object of investigation.
However, an independent FAA investigation team composed of government and aviation industry experts found that after two 737 MAX accidents in 2018 and 2019, Boeing’s improvement was insufficient and its safety culture was still flawed. Among them, some team members said that he hoped this report could "sound the alarm" for Boeing.
The team found that Boeing has improved since the accident, but it is far from enough, and its safety culture is still flawed. First of all, due to the complicated and disorderly management and training procedures, communication between Boeing executives and ordinary employees is generally poor, and it is difficult for employees to understand the company’s safety management system; Secondly, Boeing’s protection measures are insufficient to prevent employees who report safety problems from being retaliated.
"In the interview, employees showed their concern for anonymity ‘ Report ’ The report suggests that Boeing improve the system of workers voluntarily reporting safety problems, including establishing an investigation procedure to protect employees from retaliation from superiors. In addition, the report also accused Boeing of not paying enough attention to "human factors engineering" and not including enough expert advice and pilot opinions in aircraft design and high-level decision-making.
The investigation team didn’t mention too much about the incident of "doors falling off" at the beginning of this year in the report, but the assessment concluded that "such quality problems aggravated the concern of the expert team that safety-related information or behaviors were not implemented in the whole Boeing employees".
"I really hope this report will be a wake-up call for Boeing," said Rich Plunkett, a member of the team and director of strategic development of the trade union representing Boeing engineers. The investigation team called on Boeing to review its recommendations within six months and make a plan to solve these recommendations, and share the specific implementation date of the plan with the Federal Aviation Administration.
Delivery is delayed again
The security storm not only brought down the stock price, but also affected the delivery of its passenger plane. In view of these factors, the US government has postponed the airworthiness certification procedures for 737 MAX 7 and 737 MAX 10 passenger aircraft. Delta Air Lines, which has ordered 100 passenger planes of this type, said on the 10th that it speculated that Boeing might not begin to deliver these new passenger planes until 2027.
Delta Air Lines ordered 100 MAX 10 passenger planes from Boeing in July 2022, and intends to order 30. The first batch of passenger planes was scheduled to start delivery next year. However, Ed Bastian, CEO of Delta Air Lines, told Bloomberg News on the 10th that the company concluded that the delivery time of these MAX 10 passenger planes would be at the end of 2025 at the earliest, but "I guess it will take another year or two".
The MAX 10 passenger plane is the largest of the MAX series passenger planes, and Delta Air Lines intends to use it to fly domestic routes in the United States. In addition to Delta Air Lines, United Airlines earlier this year removed the MAX 10 passenger plane from the list to be ordered because of the delay in delivery. At present, it is in contact with ordering another MAX series passenger plane or placing an order with Airbus instead.
As a "giant in the air", Boeing aircraft can achieve more than 50% market share. However, according to relevant statistics, Airbus has defeated Boeing for the fifth consecutive year in terms of delivery volume, and has been firmly at the top of the aircraft manufacturing industry. According to the 2023 delivery order announced by Boeing, the total delivery volume for the whole year was 528, up by 10% year-on-year; Airbus delivered 735 aircraft in 2023, an increase of 11% year-on-year.
An Guangyong, an expert from the Credit Management Committee of the Security M&A Association, said that Boeing’s recent problems highlighted its shortcomings in product quality and safety management. These incidents not only damaged Boeing’s brand image, but also caused widespread concern about its safety standards and management system.
"At the moment of increasingly fierce competition in the aviation industry, Boeing needs to solve these problems quickly and rebuild the trust of the market and consumers, otherwise it may face long-term negative effects. In addition, the decision-making and supervision mechanism within the company may also need to be strengthened to ensure that every link in the production process can meet the highest safety standards. " An Guangyong said.
He also said that in view of Boeing’s recent problems and Airbus’s steady performance in the global market, Boeing may lose its share in some key markets. When consumers and airlines choose aircraft manufacturers, safety and reliability are one of the most important considerations.
Source: beijing business today reporter Zhao Tianshu
Process Editor: U022
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