When One Door Closes (on Boeing’s Problems), Another One Opens – The Average Joe

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    When One Door Closes (on Boeing’s Problems), Another One Opens

    victorlei

    January 8, 2024

    How did an Alaska Airlines plane’s exit door blow off mid-flight? Loose bolts. Who’s to blame? That’ll be a contentious debate between aerospace manufacturer Boeing (NYSE:BA) and its supplier Spirit AeroSystems (NYSE:SPR) — which fell 8% and 11% yesterday, respectively.

    Last Friday, a Boeing 737 MAX 9 was forced to return to the airport after a portion of its fuselage blew out minutes after departure. Shortly after, US regulators grounded 171 planes for further investigation.

    Not their first rodeo: If this sounds familiar, that’s because the MAX 9 is related to the MAX 8, which was involved in two fatal crashes in 2018 and 2019 — and grounded the entire MAX fleet until it returned to service in Dec. 2020. But trust in the aerospace manufacturer has never been the same, and neither has its stock price.

    • Boeing has struggled with “quality control problems” with third-party suppliers and production issues which have undermined Boeing’s reputation for safety.
    • The company hoped to settle these troubles by hiring CEO Dave Calhoun in 2020, but problems with virtually every Boeing aircraft series have persisted.

    That’s interrupted production and weighed on deliveries of the MAX since its 2017 introduction — with Boeing having delivered just 1.4K MAX jets on over 5.9K orders outstanding as of Nov. 2023.

    What does this mean for travelers and airlines?

    Although the MAX 9 is the least popular of the MAX series aircraft, it plays a significant role in the fleets of by Alaska Air Group (NYSE:ALK) and United Airlines (NASDAQ:UAL), which were hoping to put several years of staffing shortages and flight delays behind them. But the sudden grounding threw those plans out the door.

    • On Monday, Alaska and United canceled 20% and 8% of their total flights, respectively, while 13K flights scheduled on MAX 9 aircraft are at risk of being rescheduled or canceled.
    • Copa Airlines and Aeromexico, two of the other airlines with the most MAX 9s, also faced temporary flight suspensions.

    Flying in the next few days? There’s no reason to worry — unless you’re flying with United or Alaska. Both airlines have implemented flexible travel policies, allowing passengers to cancel or move flights, but if you want to brave the airport, make sure to watch your email for any last-minute changes.

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