As if Boeing didn’t have enough problems, a scathing report Tuesday questioned the company’s ability to pass a new federal security audit, which led to the rapid decline of its parts. Hours later, Boeing announced the appointment of an independent consultant to lead a review of the company’s quality control.
After part of an Alaska Airlines 737 Max 9 plane dislodged mid-flight, the Federal Aviation Administration’s (FAA) investigation is unlikely to yield significant findings.
In the Wells Fargo report, titled “US Federal Aviation Administration Audit Opens New Pandora’s Box,” it has been pointed out that Boeing’s quality control and engineering problems have been going on for years.
“Given Boeing’s recent track record and the FAA’s increased incentive to find problems, we believe the chances of a full audit are slim,” analysts noted. “The FAA audit is currently limited to the Max 9, but the findings may expand coverage to other Max models with similar features.”
Analysts believe the investigation is intensifying the risk that Boeing will suffer the consequences of its manufacture and delivery and have lowered the stock to “equal weight” from “overweight,” the equivalent of a “buy” rating.
A class action lawsuit filed against Boeing after the Alaska Airlines incident
Boeing shares fell 8% after the report.
Last week, the FAA opened an investigation into Boeing’s quality controls following the Alaska Airlines incident. The agency said the dramatic explosion of Alaska Airlines Flight 1282 “could never have happened and will never happen again.”
The door plug, which was supposed to cover the space left by the emergency exit door when it was removed from the side of the plane, exploded and left a gaping hole. The force of the explosive decompression and subsequent high-velocity airflow into the cabin tore the headrests from the seats as the plane flew at more than 16,000 feet, shortly after taking off from Portland, Oregon, with 177 people on board.
A few passengers were injured, but in a rare stroke of luck, no one was sitting next to the door stopper, and no one died.
The FAA said the investigation will focus on whether Boeing “failed to ensure that finished products conform to their approved design and are capable of safe operation under FAA regulations.”
The company said it will “fully and transparently cooperate with the FAA and NTSB in their investigations” in a statement Thursday.
Boeing turned to a retired senior military officer
To help respond to such investigations, Boeing has appointed an independent consultant to review quality controls on its commercial airplane production lines.
The company reported on Tuesday that a group of external experts led by Kirkland H. Donald, a retired US Navy admiral, “will conduct a comprehensive evaluation of Boeing’s quality management system. for commercial aircraft.” So the company is continuing the standard it previously set after announcing last week that it will turn to an external consultant to help evaluate its quality control.
Boeing said Donald and his team will also evaluate “quality programs and practices” at Boeing factories, as well as those of its suppliers, and report their findings to the board of directors of Boeing.
In a statement, Boeing CEO David Calhoun said the review “will provide a comprehensive, independent assessment with practical recommendations to strengthen our quality management at our factories and our commercial aircraft production system.”
On Monday, Stan Deal, Boeing’s executive in charge of the commercial aircraft division, said the company would “carefully review our quality practices in our factories and our production system.”
Before Tuesday’s decision, Deal wrote in a memo to employees, obtained by CNN, that the company would conduct multiple inspections of each 737 before delivery. He also said that Boeing is closely monitoring the work of a key supplier that builds the 737 Max fuselage.
Last week, FAA Administrator Mike Whitaker said he was considering asking “an independent third party to oversee Boeing’s inspections and its quality system.”
A week later, Calhoun acknowledged the company’s “mistake” in a “safety meeting” with all staff but did not specify what it consisted of. National Transportation Safety Board Chairwoman Jennifer Homendy demanded Boeing answer for any mistakes it made as part of a safety investigation, independent of the FAA audit.
Although the investigation is ongoing and it’s still unclear what caused the door plug to come loose from the plane, two airlines that have a large number of 737 Max 9 planes in service—Alaska Airlines and United Airlines—said they found loose ones. hardware or bolts on the plug assembly from the doors. in their planes. United said its findings pointed to possible problems with the installation.
In a letter sent to Boeing last week, the FAA gave the company 10 days to provide information about the cause of the Alaska Airlines incident. He also wants to know what steps Boeing is taking to prevent this from happening again.
Wells Fargo analysts noted in their report that the FAA’s investigation could take some time to complete, noting that many of its reviews remain “under review” months after the original incidents.
All 737 Max 9 planes remain grounded while the FAA works to approve Boeing’s inspection criteria for airlines to evaluate the safety of the plane. The regulatory body did not give a timeline for when the planes could return to service. Alaska and United canceled more than 100 daily flights pending FAA approval.
History of quality control problems
Boeing has faced repeated quality and safety problems with its planes for five years, causing the long-term grounding of some jets and halting deliveries of others.
The design of the 737 Max was found to be responsible for two fatal crashes: one in Indonesia in October 2018 and another in Ethiopia in March 2019. Together, the two crashes claimed the lives of all 346 people on board the two flights. a 20-month hiatus on the company’s best-selling aircraft, which cost it more than $21 billion.
Internal communications released during the grounding of the 737 Max show an employee describing the plane as “designed by clowns, who in turn are managed by monkeys.”
Late last month, Boeing asked airlines to check all 737 Max planes for a possible loose screw in the rudder system after an airline discovered a possible problem with a key part of the two planes.
Its quality and engineering problems went beyond the 737. Boeing also had to stop deliveries of its 787 Dreamliner twice, for about a year, starting in 2021 and again in 2023. due to quality issues cited by the FAA. The 777 plane was also grounded after an engine failure on a United flight that scattered engine debris on houses and land.
Two Max models—the Max 7 and the Max 10—are still waiting for permission to start carrying passengers. This latest incident complicates matters, Wells Fargo analysts said.
“The Max 7 and Max 10 models are now likely to be heavily scrutinized,” they pointed out. “This includes a necessary security waiver that, while perhaps reasonable, appears politically difficult to grant given recent events.”