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February 24, 2024

Boeing Under Scrutiny After Latest 737 MAX Incident

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Jan 21, 2024

Boeing is facing renewed scrutiny after a panel blew out of a 737 MAX airplane during a flight this month, resulting in minor injuries and prompting the grounding of over 100 similar aircraft. This latest incident has raised further concerns about Boeing’s safety culture and manufacturing practices.

Mid-air Blowout Leads to More Disruption

On January 5th, Alaska Airlines flight 1282 was enroute from Seattle to San Diego when a plug door on the side of the plane blew out at around 30,000 feet. The plug is designed to ensure proper pressurization, and its failure caused a loud noise followed by violent turbulence. Debris from the door panel struck the fuselage, wing, engine and stabilizer. Though none of the approximately 170 passengers and crew were seriously injured, at least 12 individuals received medical treatment.

In response, both Alaska Airlines and Boeing immediately grounded all 737 MAX airplanes with the same plug door type as the one that failed. This resulted in the cancellation of at least 110 Alaska Airlines flights per day while inspections are underway. Boeing has indicated that the initial 40 plane inspections were completed by January 17th, though no timeframe has been provided for returning the MAX to service.

The mid-air blowout has already spawned multiple lawsuits from passengers alleging emotional distress and physical harm. Additional litigation aimed at both Boeing and Alaska Airlines over faulty maintenance work is likely.

Ongoing MAX Woes

This incident has stirred up memories of the troubled history of Boeing’s MAX program. The 737 MAX was grounded globally in 2019 after two fatal crashes killed 346 people. A faulty flight control system was identified as a factor in those accidents.

While Boeing invested billions of dollars to upgrade software, implement new safety procedures and settle lawsuits from crash victims’ families, the MAX only returned to skies in late 2020. More recently, Boeing had to address production issues that left over 100 improperly manufactured MAXs needing rework.

Just as confidence was rebuilding around Boeing and the MAX specifically, this blowout introduces new uncertainty. It also raises the question of whether a pattern of quality issues exists across Boeing’s manufacturing and supply chain.

Supplier & Regulator Focus

Information has already emerged implicating one of Boeing’s suppliers in the door panel failure. On January 18th, the U.S. National Transportation Safety Board Chair indicated the panel was manufactured by Spirit AeroSystems in Malaysia.

Spirit is one of the largest aerospace component makers, producing fuselages, pylons and wing components for Boeing among others. It spun off from Boeing in 2005 and remains a vital supplier.

While the root cause investigation continues, early scrutiny has turned to the certification process for door plugs which do not have the same safety requirements as full emergency exit doors. This approach had previously not drawn much attention.

Critics have also accused the Federal Aviation Administration (FAA) of becoming too cozy with Boeing. As evidence, they point to the relatively smooth recertification of the MAX in 2020. In the aftermath of this incident, the FAA has pledged stricter oversight including potential unannounced audits of Boeing factories. The agency also intends to review certification practices to prevent future oversights.

Financial Implications

With $5 billion in charges since 2019 plus declining market share, Boeing has paid a heavy price through the MAX groundings and the pandemic. The aircraft manufacturer has been eager to turn the page and had finally appeared ready for a reset in 2023.

Instead, this new crisis has already impacted Boeing’s stock price which slid almost 5% in the days after the blowout. It also prompted rating agencies to reconsider their positive 2023 expectations for Boeing and airlines impacted by the MAX groundings like Alaska Airlines.

The financial consequences promise to grow as investigations proceed and lawsuits mount over the incident. Boeing CEO Dave Calhoun has already committed to compensating Alaska Airline customers, likely to the tune of millions of dollars when considering hotel stays, rebooked travel and goodwill payments.

What Comes Next?

Increased regulatory scrutiny, legal liability and added costs seem inevitable in the short term following this episode. However, Boeing’s long term prospects likely depend most on identifying root causes and correcting them.

There are calls for leadership changes and an overhaul of Boeing’s corporate culture which had emphasized speed and cost-cutting over safety leading up to the original MAX crashes. How executives respond to this latest crisis may determine whether Boeing can rehabilitate its reputation with airlines and flyers.

While passenger fears have eased since 2020, memories are still fresh and trust remains fragile. More manufacturing issues or negative news related to the MAX could have an outsized impact on sales. This gives Boeing a strong incentive for full transparency around the blowout investigation and implementing any necessary changes.

If Boeing can deliver those outcomes and avoid further incidents over the next 6-12 months, airlines and customers may regain confidence. If additional problems emerge or the causes point toward systemic rather than isolated factors, the damage to Boeing’s business and the MAX program specifically could be more long-lasting.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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