Boeing Max crisis forces airlines to cut flights, pause hiring, CEOs say

Boeing Max crisis forces airlines to cut flights, pause hiring, CEOs say

An aerial photo shows Boeing 737 Max airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, on March 21, 2019.

Lindsey Wasson | Reuters

Boeing‘s latest Max crisis is forcing some of its biggest customers to rethink their growth plans this year — and possibly beyond, several airline CEOs said Tuesday.

Their comments highlight how Boeing’s top buyers have felt the effects of its problems: snowballing quality control issues, a slow increase of output and certification of new aircraft that is running years behind schedule.

Southwest Airlines, which only flies Boeing 737s, trimmed its 2024 capacity forecast and said it was reevaluating its 2024 financial guidance, citing fewer Boeing deliveries than it previously expected this year: 46 Boeing 737 Max planes, down from 79.

“Boeing needs to become a better company and the deliveries will follow that,” Southwest Airlines CEO Bob Jordan said at a JPMorgan industry conference Tuesday.

Alaska Airlines said Tuesday that its 2024 capacity estimates are “in flux due to uncertainty around the timing of aircraft deliveries as a result of increased Federal Aviation Administration and Department of Justice scrutiny on Boeing and its operations.”

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United Airlines CEO Scott Kirby said at the JPMorgan conference on Tuesday that the carrier has asked Boeing to stop building it Max 10 planes, an aircraft that hasn’t yet been certified by the FAA, and produce more Max 9s, which are flying already.

“It’s impossible to say when the Max 10 is going to get certified,” Kirby said. In January, Kirby said the airline would build a fleet plan without the Max 10 because of the delays.

On Friday, United told staff that it would have to pause pilot hiring this spring because new Boeing planes are arriving late, CNBC reported.

The frustration from airline bosses has been building in recent months since Boeing’s latest crisis stemmed from a door panel that blew out midair from a Max 9 plane during an Alaska Airlines flight in January. The accident ramped up scrutiny on Boeing, and a preliminary National Transportation Safety Board investigation said bolts on the door panel didn’t appear to be attached when the planes left the company’s factory in Washington state.

“We are squarely focused on implementing changes to strengthen quality across our production system and taking the necessary time to deliver high quality airplanes that meet all regulatory requirements,” Boeing said in an emailed statement. “We continue to stay in close contact with our valued customers about these issues and our actions to address them.”

The FAA has halted Boeing’s planned output increases and said a recent audit “identified non-compliance issues in Boeing’s manufacturing process control, parts handling and storage, and product control.”

Boeing’s CEO Dave Calhoun and other leaders have vowed to stamp out quality control problems, and have been holding a number of work pauses to discuss issues with workers.

On Tuesday, Stan Deal, Boeing’s commercial airplanes’ unit CEO, told staff that the company would work with employees who have been found to have non-compliant issues during the audit to make sure they “fully understand the work instructions and procedures” and implement weekly compliance checks, and plan for more audits this month.

In a note to staff, Deal said employees must “precisely follow every step of our manufacturing procedures and processes” and “always be on the lookout for a potential safety hazard,” telling employees “you are fully empowered to report it through your manager or the Speak Up portal, so we address it right away rather than travel the risk to the next person or position.”

Source: https://www.cnbc.com/2024/03/12/boeing-max-problems-shift-growth-plans-at-southwest-united.html

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