Breaking
May 29, 2024

Emirates chief issues final warning to Boeing over ongoing issues

AiBot
Written 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.

Feb 5, 2024

Emirates President Tim Clark has warned Boeing it is in the “last chance saloon” over ongoing manufacturing issues with its aircraft, saying the airline could switch suppliers if problems are not resolved.

Long-running saga between airline and manufacturer

Emirates and Boeing have had a turbulent relationship in recent years, centered around issues with the new 777X aircraft. Emirates is due to receive the first 777X delivery later this year as part of a $16 billion order made in 2019.

However, the aircraft has been repeatedly delayed and is over three years behind schedule. Late last year the 777X certification was pushed back to 2025 due to a number of issues still to be resolved.

In an interview with the Financial Times, Clark expressed his growing frustration with Boeing’s inability to rectify problems with their aircraft:

“This is really their last chance saloon as far as we are concerned…If they don’t get their act together, we have got to replace them.”

This stark warning indicates Emirates may turn to rival manufacturer Airbus if Boeing does not meet its commitments on the 777X and other aircraft.

Specific problems cited with Boeing’s planes

Clark highlighted a number of areas where Emirates has experienced issues with Boeing’s aircraft:

  • Quality defects – Problems with interior fittings coming loose, as well as issues with gear retraction and door seals. Clark indicated Emirates has “a shopping list of things that need to be done” to fix these defects.

  • Engine failures – A number of engine shutdowns have occurred on Emirates’ 777 fleet, with General Electric engines being particularly problematic.

  • Certification delays – The 777X certification has been pushed back multiple times, now not expected until 2025 rather than the original target of 2020.

To address these problems, Clark said Emirates plans to send its own engineers to work directly with Boeing:

“We are going to embed some of our own people in their factory to expedite all this stuff. And make sure these airplanes are configured the way that we have paid to have them configured.”

If Boeing fails to resolve the issues however, Clark says Airbus stands ready to supply their aircraft:

“There isn’t an aircraft that Airbus makes that we don’t already have…I could switch tomorrow.”

Costly switch appears more likely

Emirates ordering Airbus planes to replace its Boeing fleet would involve considerable cost and inconvenience. However Clark seems willing to undertake this if manufacturing issues are not fixed.

The table below shows numbers of different aircraft types currently operated by Emirates:

Aircraft model Number in fleet Notes
Boeing 777 165 Main widebody aircraft, issues with engines and airframe defects
Airbus A380 118 Large 4-engine jet facing retirement
Boeing 787 0 Smaller widebody not currently used

Switching a significant portion of the 165 777s to Airbus A350s would require pilot retraining and adjustments of maintenance procedures. It would also leave Boeing losing one of its largest customers for what was previously its most successful model.

For Emirates though, it appears they feel they have little choice given the ongoing uncertainty around Boeing’s ability to deliver aircraft on-time and to specification. President Tim Clark seems ready to undertake the painful process of replacing Boeing planes if they cannot meet Emirates’ quality requirements.

Cost blowouts and further delays possible for Boeing

Losing Emirates 777X orders would be financially disastrous for Boeing. The aircraft program is already under extreme pressure after delays and spiralling development costs.

Boeing has racked up nearly $30 billion in abnormal costs relating to the 777X. Recertification work needed for the aircraft could require investment of a further $10 billion according to analysts. This cost blowout comes as Boeing seeks to recover from crashes of the 737 MAX which has also cost the company over $20 billion.

If the 777X suffers cancellations or further delays, it raises doubts whether the aircraft can ever break even given massive upfront development costs. Boeing is relying on the new long-haul plane to be a reliable cash generator, but budget overruns now make that less likely.

Emirates switching to rival Airbus planes would only compound Boeing’s financial problems. It may force them to reconsider continuing with 777X production if orders collapse.

With Clark’s warning of significant consequences if issues are not addressed, Boeing faces a pivotal moment. The aerospace giant must demonstrate to Emirates and other customers long-running manufacturing problems are finally being resolved.

Otherwise cancellations could turn what is already a financially troubled aircraft program into an existential corporate risk. Boeing’s fate may well come down to whether Emirates’ ultimatum can be adequately answered.

Final lifeline or end of partnership?

By allowing its engineers inside Boeing’s factories to directly monitor and advise remedial action, Emirates seems to be handing Boeing one final lifeline.

If these interventions can facilitate solutions and rebuild trust, it may ultimately strengthen the relationship. CEO Tim Clark appears reluctant to abandon Boeing altogether, having partnered with them successfully for decades.

But his extraordinary warning shot across Boeing’s bows indicates Emirates’ patience has run out. No more second chances – either problems are fixed once and for all, or Boeing loses one of its most prestigious customers.

What remains uncertain is whether years of accumulated manufacturing issues can genuinely be resolved to Emirates’ satisfaction within a short timeframe. If not, a divorce from Boeing looks increasingly probable after first delivery of the 777X in late 2024.

This looming deadline could make or break an aviation partnership that has driven long-haul air travel growth for a generation. The next 12 months seem certain to determine Boeing and Emirates’ future together one way or another.

What comes next?

Emirates allowing its engineers to work inside Boeing’s factories over coming months should enable rapid feedback on remediation progress. CEO Clark will be expecting swift results from these interventions, designed to guarantee contractually compliant aircraft.

If tangible outcomes become apparent later in 2024 with planes delivered on-time and meeting specifications, cancellation threats may ease. However further slippages or quality issues arising could trigger an irreparable breakdown in relations.

Rival manufacturer Airbus will likely be courting Emirates intensively behind the scenes. They hope to capitalize on Boeing’s situation by offering alternative widebody aircraft should final straws emerge.

Airbus may even look to buy substantial space at November’s Dubai Airshow in order to showcase products to Emirates and other Gulf carriers. This would place public pressure on Boeing ahead of the 777X’s anticipated late 2024 Etihad service entry.

Boeing’s response at Dubai will also be closely watched. Despite CEO Clark’s dire warnings, Boeing will not abandon the lucrative Gulf market without a fight.

Conclusion

Emirates’ blunt message for Boeing to resolve its long-running manufacturing issues or lose Emirates’ business marks a dramatic escalation. While the threat of switching suppliers has been made before, Tim Clark’s insistence this is Boeing’s “last chance” indicates stakes are now existential.

Engine failures, certification delays and quality defects with Boeing’s aircraft have exhausted Emirates’ patience. By inserting its own engineers inside Boeing factories, they hope remediation can still occur in time to save partnership.

But after years of similar promises from Boeing, Emirates seems unwilling to give them yet another lifeline without results. The next 12 months will likely determine whether this seminal aviation relationship can survive or will end in recriminations and cancellations.

Boeing faces a monumental challenge to convince its most important customers like Emirates that an era plagued by delays and plunging quality standards is finally over. If not, the financial viability of key aircraft models like the 777X may never recover from wreckage of ruptured relations with buyers like Emirates.

Tim Clark’s message was unambiguous – Boeing’s last chance saloon to deliver on its promises is now open for business. But time may already have run out to change perceptions and save partnerships that previously fuelled global aviation growth. The ultimate loser from failure to resolve Boeing’s ongoing organisational issues now appears far more likely to be Boeing itself.

AiBot

AiBot

Author

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.

Related Post