One of the largest aircraft manufacturers, Boeing, found itself in a crisis situation after a series of safety problems. Bloomberg reported that the American manufacturer plans to sell a number of assets. UNN decided to investigate how it all started and how the situation with the company could affect the aerospace industry.
Fatal door
On January 5 this year, a Boeing 737 MAX-9 of Alaska Airlines, flying from Portland to Ontario, California, was forced to make an emergency landing after an emergency exit door detached from the aircraft during the flight. Fortunately, there were no casualties.
But this incident drew attention to the safety of operating Boeing 737 MAX-9 aircraft.
The US Federal Aviation Administration (FAA) imposed a temporary ban on Boeing 737 MAX-9 flights, which was nevertheless soon lifted - the ban was in effect in January and lasted less than a month. But the company received permission to operate the MAX-9 with certain restrictions - the FAA prohibited Boeing from expanding production of its MAX aircraft or approving additional production lines for the aircraft "until we are satisfied that the quality control issues identified during this process are resolved." The company agreed to these requirements and promised to strengthen control over ensuring the safety of using airliners.
But another alarming call came from the FAA - they stated that a production inspection revealed facts of non-compliance with quality control requirements. The agency asked the company to eliminate these problems. Boeing expressed full commitment to the need to eliminate the problems and announced the development of a strategy to improve the quality control system.
But the unfortunate incidents did not end there.
On March 4, a Boeing 737-900 United Airlines plane, en route 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 flying from the US to Japan was forced to make an emergency landing because its wheels fell off completely.
Perhaps the most serious incident was with a Boeing 787 LATAM Airlines, which was flying from Sydney to Auckland, USA, and suddenly lost altitude halfway through. At least 50 people were injured as a result of the plane's fall.
In a message to customers shared with POLITICO, United Airlines CEO Scott Kirby said: "Unfortunately, in recent 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 drawn and intensified our attention."
The issue of Boeing aircraft safety, particularly the 737 MAX model, has been raised multiple times. In December 2018, a Boeing 737 MAX crashed in Indonesia, killing 189 passengers and crew members, and in March 2019, another aircraft of the same model crashed in Ethiopia, killing 157 people. After these tragic incidents, the production of this aircraft model was halted for almost 2 years. The company used this time to modernize the aircraft's design, update software, and train pilots.
What's happening with Boeing
Bloomberg reported that Boeing is considering selling at least two of its defense businesses. This is due to the crisis the aircraft manufacturer is facing.
According to people familiar with the negotiations who wished to remain anonymous, financial advisors have contacted potential buyers on behalf of Boeing to gauge interest in several smaller units. According to one source, these efforts have been ongoing for about a year, even before the door incident that drew close attention to the aircraft manufacturer.
Potentially for sale assets include Boeing Digital Receiver Technology Inc. (involved in developing communication technologies), which produces products for government intelligence and defense customers, sources say. According to some sources, potential buyers were also questioned about some defense programs in the global services unit.
Richard Aboulafia, an aerospace industry expert at AeroDynamic Advisories, stated that 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.
Previously, the aircraft manufacturer considered selling its subsidiary Argon ST, but this process has been suspended, one source said. In 2010, the corporation acquired Argon, which produces military command, surveillance, and reconnaissance systems, for approximately $775 million.
Boeing declined to comment. Shares rose 1.1% after Bloomberg reported on the discussions.
The company also continues to weigh options for its stake in United Launch Alliance, a joint venture for rocket launches co-owned by Lockheed Martin Corp., sources said. In January, Bloomberg News reported that ULA had attracted interest from Jeff Bezos's Blue Origin LLC.
According to some sources, Boeing has not yet made a final decision on the sale, and plans may still change. According to these people, the company regularly reviews its asset portfolio.
Can airlines refuse Boeing aircraft?
At the "Europe 2024" conference in Berlin, Airbus CEO (Boeing's largest competitor) Guillaume Faury expressed concern about maintaining the aerospace industry's safety reputation.
"I am not happy with my competitor's problems," he said when asked about Boeing.
"They don't benefit the industry as a whole." Faury added: "We operate in an industry where quality and safety are the top priority."
During the event, as reported by Bloomberg, French Finance Minister Bruno Le Maire said: "Now I prefer to fly on Airbus, not Boeing - my family too, they care about me."
A survey conducted by aviation industry journalist Jon Ostrower, founder of the aviation news website The Air Current, shows that trust in Boeing aircraft is weakening, but not lost.
Ostrower's survey on X asked: "With the 737 Max family back in service, do you feel comfortable flying on this aircraft?" Out of over 2200 votes, 59.4% of participants answered "Yes" versus 40.6% who answered "No."
Analysts note that the Boeing 737 Max remains the world's best-selling aircraft type, with over 4,000 orders for this type of aircraft.