Boeing has been in the process of a turnaround in quality, which reached its nadir when bolts were not replaced in a door plug, resulting in an explosive decompression on an Alaska Airlines 737 MAX 9 in January 2024. Since then, Boeing has replaced its CEO, who has taken decisive actions to improve processes and quality at the firm. But that process has primarily been two steps forward and one step back. Despite the best efforts, a decade of loose quality practices will still “come home to roost” at Boeing’s door. 737 MAX production There has been considerable progress with the MAX program since the management change. The FAA and Boeing agreed on several key performance indicators associated with manufacturing quality. Those KPIs will objectively determine when the company will be capable of increasing production rates for the MAX from the current FAA limit of 38 per month. Boeing has been making slow progress but has not yet approached the current maximum rate, which it expects to achieve by year-end. We don't expect Boeing to reach the 38-per-month limit until the fourth quarter of 2025 at the earliest. Certification of the MAX 7 and MAX 10 Boeing has also requested a certification exception for the MAX 7 and MAX 10 models. That request has been controversial, with opposition from pilots unions, as the component in question, the Stall Management Yaw Damper (“SMYD”) feeds the third “synthetic” angle-of-attack sensor that works with the MCAS system, a contributing factor to the two fatal MAX crashes in 2017 and 2018. Without that exemption, Boeing cannot complete the two new models on schedule for late 2025 and mid-2026. Complicating the matter, airline pilot unions have opposed granting Boeing the exemption, preferring that the avionics be completed to the higher certification level required based on updated requirements. Boeing had already opted not to pursue a different exemption request for the two new MAX models with respect to the engine nacelles on the program. That decision was made after the Alsaka door blowout, and Boeing may have felt they would have little chance for success. The engine de-icing system produces heat that could damage the nacelles if kept on for more than five minutes. Unfortunately, there is no EICAS system on the MAX nor any way to notify the pilots that the de-icing system is on. As a result, Boeing is redesigning the nacelle to avoid overheating issues rather than improve the cockpit with updated avionics. The massive 787 inspection program is now complete Boeing has also completed the inspection of 126 Boeing 787 aircraft currently in inventory to ensure that fuselage sections fit together correctly and have been appropriately shimmed. Boeing had created a “shadow” manufacturing line in Everett, Washington, to handle the inspection and repairs and is now ready to close that facility, having completed the work on the entire inventory. We expect Boeing to pick up its delivery rate for the 787 due to completing the inspections and repairs and bringing the aircraft up to delivery standards. These inspections came after Boeing discovered that the fit between fuselage sections made worldwide was not within specification and that the distances usually satisfied with shims remained outside design limits. Airworthiness Directive Finalized But issues remain. The FAA has issued a final airworthiness directive for the 737NG series engine nacelles, which failed in two un-contained engine failure incidents with Southwest Airlines. One of those resulted in a broken window and a passenger fatality due to an explosive decompression that pulled her through the window. While Boeing had long issued a special service bulletin to fix the issues, the new AD makes those actions mandatory. The two incidents happened several years ago. New cracks on the KC-46A This week, cracks were found in the Boeing KC-46A tanker, which is based on the Boeing 767 airframe. The US Air Force suspended tanker deliveries after cracks appeared on two of four aircraft ready for delivery. While those cracks in the “outboard fixed trailing-edge support structure” do not pose a serious safety risk, they need repairs to ensure that the required duration and mission range remain feasible. The USAF will inspect the remaining 89 KC-46A Pegasus Tankers already in service. The low point in program quality came in 2022 when the United States Government Accountability Office (“GAO”) reported that the aircraft had seven “category one” deficiencies that could result in death, severe injury, or serious occupational illnesses. In 2023, that prompted the USAF to halt deliveries to give Boeing time to address the concerns. Despite multiple issues during troubled development and performance issues with the refueling vision system for the boom operator, the USAF has continued to acquire the aircraft despite inferior performance and quality. The Bottom Line Boeing is making substantial progress with quality and safety. But in aviation, there can never be periods in which quality and safety take a back seat to stock price. After two decades under management that favored finance over product, the shortcuts taken will come to light. The latest example, with the KC-46A, indicates how earlier attitudes can manifest themselves and impact the company today. Since problems can crop up at any time, Boeing needs to remain vigilant in its production processes, even ones the company has used for many years. Our industry always reacts to solve problems and ensure that they never occur again. Boeing has learned the hard way since the MAX crashes and the MAX 9 door incident. However, issues are being corrected, and the company is moving in the right direction. But as with anything in aviation, it will likely be two steps forward and one step back as past sins always tend to emerge. Let's hope that the actions during the period of Jack Welsh apostles don't come back to haunt the company.
