One of the largest airplane manufacturers Boeing has found itself in a crisis situation after a number of safety problems. Bloomberg reported that the U.S. manufacturer plans to sell a number of assets. UNN decided to understand where it all started and how the situation with the company may affect the aerospace industry.
Fatal Door
On January 5 of this year, an Alaska Airlines Boeing 737 MAX-9 flying from Portland to Ontario, California was forced to make an emergency landing after the plane's emergency exit door fell off during the flight. Luckily all was without casualties.
But the incident has brought attention to the issue of the safe operation of Boeing 737 MAX-9 airplanes.
The U.S. Federal Aviation Administration (FAA) imposed a temporary ban on Boeing 737 MAX-9 flights, which would nevertheless soon be lifted - the ban was in effect in January and lasted less than a month. But the company's authorization to operate the MAX-9 came with certain restrictions - the FAA prohibited Boeing from expanding production of its MAX airplanes or approving additional production lines for the airplanes "until we are satisfied that the quality control issues identified during this process have been resolved." The company agreed to such demands and promised to strengthen its controls to ensure the safety of airliner use.
But there was another wake-up call from the FAA - it saidthat a production inspection had found noncompliance with manufacturing quality control requirements. The agency asked the company to correct these problems. Boeing was fully committed to correcting the problems and said it was developing a strategy to improve its quality control system.
But the misadventures didn't end there.
On March 4, a United Airlines Boeing 737-900 traveling from Texas to Florida was forced to make an emergency landing after flames erupted from one of the plane's engines .
On March 13, an American Airlines Boeing 777 made an emergency landing in California after the crew reported a flat tire.
And on March 7, a plane traveling from the U.S. to Japan was forced to make an emergency landing, because a wheel had fallen off.
Perhaps the most serious was the incident involving a LATAM Airlines Boeing 787 traveling from Sydney to Auckland in the United States that suddenly lost altitude halfway through its journey. At least 50 people were injured as a result of the crash of the airplane.
In a message to customers that the airline shared with POLITICO, United Airlines CEO Scott Kirby said: "Unfortunately, over the past few weeks, our airline has experienced a number of incidents that remind us of the importance of safety. While all of them are unrelated. I want you to know that these incidents have gotten our attention and increased our focus.
The safety of Boeing airplanes, particularly the 737 MAX model, has been raised more than once. In December 2018, a Boeing 737 MAX crashed in Indonesia, killing 189 passengers and crew members, and in March 2019, another airplane of the same model crashed in Ethiopia, killing 157 people. After these tragic incidents, production of this model of aircraft was halted for almost 2 years. The company used this time to modernize the airliner's design, update software and train pilots.
What's going on with Boeing
Bloomberg reported that Boeing is considering selling at least two of its defense companies. This is related to the crisis in which the airplane manufacturer finds itself.
According to people familiar with the negotiations, who wished to remain anonymous, financial advisers contacted potential buyers on behalf of Boeing to gauge interest in several smaller units. One source said those efforts had been going on for about a year, even before the door incident that drew intense scrutiny on the aircraft maker.
Assets potentially up for sale include Boeing's Digital Receiver Technology Inc. division (which develops technology in communications), which makes products for government intelligence and defense customers, sources said. Some sources said potential buyers were also interviewed about some defense programs in the Global Services division.
Richard Aboulafia, an aerospace expert at AeroDynamic Advisories, statedthat the sale of DRT is unlikely to have any significant financial impact on Boeing, which is struggling under the burden of $39 billion in debt.
The aircraft manufacturer had previously considered selling its Argon ST subsidiary, but that process has been put on hold, a source said. In 2010, the corporation acquired Argon, which makes military command, control, surveillance and intelligence systems, for about $775 million.
Boeing declined to comment. Shares rose 1.1 percent after Bloomberg reported the discussions.
The company also continues to weigh options for its stake in United Launch Alliance, a rocket launch joint venture co-owned by Lockheed Martin Corp., sources said. In January, Bloomberg News reported that ULA had attracted interest from Blue Origin LLC Jeff Bezos.
Some sources said Boeing has not yet made a final decision on the sale, and plans could still change. According to these people, the company is regularly reviewing its asset portfolio.
Could airlines abandon Boeing airplanes
At the Europe 2024 conference in Berlin, Guillaume Faury, CEO of Airbus (Boeing's biggest competitor), expressed concern about the aerospace industry's continued reputation for safety.
"I'm not satisfied with my competitor's problems," he said in response to questions about Boeing.
"They do not benefit the industry as a whole." Forey added: "We work in an industry where quality and safety are a top priority.
During the event, as reported by Bloomberg , French Finance Minister Bruno Le Maire said: "Now I prefer to fly on Airbus rather than Boeing - my family too, they take care of me.
A survey conducted by aviation journalist John Ostrower, founder of aviation news site The Air Current, shows that confidence in Boeing airplanes is waning but not lost.
Ostrower's X poll asked the question, "After the 737 Max family is back in service, do you feel comfortable flying this airplane?" With over 2,200 votes, 59.4% of participants answered "Yes" versus 40.6% who answered "No".
Analysts say the Boeing 737 Max is still the best-selling airplane type in the world, with more than 4,000 orders for this type of airplane.