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July 21, 2024
Boeing HQ
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Today’s key stories about Boeing center about its legal issues, in particular the breach of the Deferred Prosecution Agreement that now enables the US Department of Justice bring criminal charges against Boeing in the wake of the two 737 MAX crashes.

In other news, Boeing delivered the fewest airplanes that it has since the 737 MAX grounding, and new orders were negative last month, with cancellations outnumbering orders.  New production of the MAX was only 9 aircraft, with the remainder of deliveries coming from inventory.  EVA Air in Taiwan was revealed as an unidentified customer in April for 2 787-10 and 2 777X aircraft.

The impact of Boeing’s problems for airlines remains a key topic.  COPA Airlines from Panama and TUI are the latest airlines to have complaints reported by the press.  Finally, in good news for Boeing, Austrian Airlines first 787 Dreamliner has arrived in Vienna, and that EVA Air has come out as a formerly undisclosed customer for the 787-10 and 777-9.

Links to today’s key stories follow:

  • Feds warn Boeing of criminal charges after airliner ‘failed’ to improve plane safety following 737 crashes – Independent (UK)
  • Explainer – How Boeing could face the criminal prosecution it avoided in 2021- Yahoo
  • Orders and Deliveries through April 2024 – AirInsight
  • COPA delays 737 MAX 8 launch amid Boeing delivery woes – Airline Geeks
  • TUI faces ‘significant’ costs due to Boeing delays – Skift
  • EVA Air Orders New Boeing 787-10s and 777X – Aviation A2Z
  • First 787 Dreamliner for Austrian airlines touches down in Vienna – Aerotime Hub

The Bottom Line

Boeing understands the seriousness of the issues it is facing and the legal difficulties the company is in.  Production rate increases, which drive cash flow on delivery of aircraft, is the lifeblood of the company, are now dependent on meeting FAA standards.  The recent actions for joint inspections at Spirit and preparing “clean” fuselages indicate that Boeing is taking the task of improving quality seriously.  The bad news is that it is not a quick process, and we’ve revised out projected production rates downward for the year after Boeing produced only 9 new 737 MAX aircraft in April.

On the legal front, Boeing is facing investigations from the Department of Justice, Securities and Exchange Commission, Federal Aviation Administration, National Transportation Safety Board, and the US Congress.  The FAA still retains Boeing’s production certificate authorities, that it took back after the 737 MAX crashes, and Boeing cannot unilaterally raise production rates.  Multiple deadlines are upcoming, including a revamped quality system due in less than a month, which the FAA must review before agreeing to proposed rate increases. Boeing’s lawyers are having a bellwether year.

If this wasn’t bad enough, the challenges are compounded by a leadership change, customer payments for late deliveries, and on-going quality issues that will take additional time to solve.  It is no wonder that several potential CEO candidates have expressed no interest in a job that entails multiple risks and an up or down career legacy for the next leader.  Selecting the next leader, and taking control of the situation is job one.

author avatar
Ernest Arvai
President AirInsight Group LLC

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