Boeing HQ
Todays key stories are mixed, with some positive and some negative events impacting Boeing. Starting with the good news, Boeing appears to have been cleared to resume wide-body jet deliveries to China after further testing of batteries powering the aircraft’s cockpit voice recorder. Deliveries of the 737 MAX may also resume, which should reduce Boeing’s inventory and help 3rd quarter cash flow after two very negative quarters.
The other good news is that Boeing will brief European regulators on its new 737 MAX production plans after the door plug blowout, and will do the same with other regulators as appropriate. Reciprocity with the FAA remains in place, a good thing for Boeing, and providing confidence to international regulators will help maintain that process.
Boeing also disclosed productivity improvements after implementing a new program with Spirit, resulting in fewer defects and a reduction in traveled work. Having correct parts delivered is important for Boeing to be able to increase its 737 production rate. With the acquisition of Spirit AeroStructures, Boeing will have complete control of that process once the deal closes.
Boeing also had a pre-Farnborough factory media tour touting the change made since the blowout incident, and spoke about the Alaska 1282 incident despite being prohibited to by the NTSB. Boeing, which is noted for not being transparent, suddenly chose a prohibited topic for public disclosure of information while an investigation is still in process. Boeing should have known better.
The NTSB is implementing sanctions against Boeing the will exclude them from investigative reports and data as a result of this disclosure, and has made a referral to the Department of Justice for criminal prosecution. There are times to be transparent, and Boeing has missed many of these opportunities, and also times to remain silent citing regulations, and this is one of them. Given the cash flow deficit, Boeing’s urgently desires to get the incident behind them quickly so that production rates can be increased. We expect further strong recommendations from the NTSB related to Boeing’s production and quality control that could be more costly and expensive than the new processes being put into place.
An incident with a Ryanair 737 MAX has come to light that is disturbing, and is being investigated by the British Aircraft Accident Investigation Board. Apparently, after a go-around, a Ryanair MAX suddenly dropped 2,000 feet in 17 second, an alarming dive that would equate to a nearly 8,000 feet per minute descent. Determining the cause of this aircraft nosedive, that occurred late last year, could uncover additional issues, particularly after two Southwest Airlines incidents of altitude loss. Hopefully the NTSB and AAIB will find the answer. The last thing Boeing needs is a another grounding of the MAX or a safety issue that requires new maintenance activity for the active fleet.
Links to today’s key stories follow:
- NTSB rebukes Boeing after top exec discloses detail on Alaska Airlines blowout – Seattle Times
- Boeing talks up changes at 737 MAX plant, but earlier lapse still a mystery – Seattle Times
- Ryanair Boeing 737 MAX dives 2,000 ft. in 17 seconds sparking investigation – iNews
- Boeing sees fewer fuselage defects, helping lift productivity – BNN Bloomberg
- At Boeing factory, airplane manufacturer touts changes since door plug blowout- ABC News
- Boeing to brief European regulators on new production plans after 737 MAX panel blowout – Reuters via Yahoo
- Boeing said cleared to resume wide-body jet deliveries to China – BNN Bloomberg
