Can Boeing Repair the $12B Hole in Its Reputation? | WSJ

– A hole in a plane,
government investigations, aircraft being grounded, $12 billion wiped from the stock price and airlines reexamining their aircraft to find yet more manufacturing faults. This wasn't exactly the start
to 2024 that Boeing wanted. See, after spending years
enduring the fallout from the MAX crisis where
two Boeing planes crashed due to a flight control design flaw killing hundreds of people, the company was finally showing
signs of a full recovery. – They had normalized production levels, they were getting some more
respect on Wall Street. – But then a door plug from an Alaska Airlines Boeing aircraft, which had only been
delivered months before, fell off in midair, triggering yet another
crisis for the company.

– What does Boeing look
like in the next few years if it has to deal with another crisis? – [George] So can Boeing
afford another setback? While nobody was killed
or seriously injured in the Alaska Airlines accident- – We coulda ended up with
something so much more tragic and we're really fortunate
that that did not occur here. – [George] The door plug, which is a panel used to plug up the space where an emergency exit would be, fell off early in the flight. – It was shortly after takeoff, passengers were still in their seatbelt, the plane was ascending and there was no one seated right next to the door plug that blew off. – If somebody had been in that seat, it's likely they probably would've died. That's at least what
we're told by the NTSB. And that's really what's
triggered this massive panic and investigation into
what actually happened. – [George] One major question in the accident investigator's probe is whether this was a one-off accident for the singular door plug, or a manufacturing issue that could affect many
of Boeing's aircraft.

The door plugs are manufactured by a company called Spirit Aerosystems, which actually used to be part of Boeing until the division was spun off in 2005. Spirit has said it's working with Boeing to determine what went wrong, but a crucial piece of evidence, the bolts that are supposed to
hold the door plug in place, remain missing, – And we have not yet determined
if they existed there. – Figuring out what
happened with the bolts is a key piece of this. – The accident led to the FAA grounding around 170 MAX 9 aircraft and ordering the inspection of the planes. But it wasn't long before
the reputational damage to Boeing and the FAA
began to spread further than the MAX 9's door plugs. See, when it comes to
recommendations, inspections, and safety checks for Boeing and other American made aircraft, airlines and regulators across the globe typically follow the lead of the FAA. However, around the same time that both United Airlines
and Alaska Airlines announced they'd found loose
bolts on their aircraft- – What we saw was airlines
saying, "You know what? We're gonna check our aircraft,
our Boeing MAX aircraft, even though they're not the models that the FAA has stipulated
need to be checked." – Despite having no MAX 9 aircraft, South Korea, China, and India
all ordered their airlines to examine their fleet of MAX 8 aircraft, though they found nothing.

And Indonesia ordered Lion Air to inspect the doors
on its MAX 9 aircraft. – It's certainly a sign
that Boeing doesn't have full, full confidence of safety regulators or its airline customers. – That really speaks to this idea that there may be a loss of
faith, not just in Boeing, but also in Boeing's oversight by the FAA. – The FAA's administrator,
Mike Whitaker, said "The agency showed its
global leadership on safety by immediately grounding the MAX 9," and said, "Regulators would
make sure the planes were safe before they fly again." That potential loss of faith could impact the range of planes that Boeing is able to
offer in years to come.

And to understand why, you need to go back to the
MAX crashes of 2018 and 2019. – An Indonesia passenger
plane crashing into the sea minutes after takeoff. – [Reporter] Rescuers have located debris, but they do not expect
to find any survivors. – The new Boeing 737 crashing, just minutes after takeoff in Ethiopia. – 157 people from more than
30 countries were killed. – [George] The crashes of
two Boeing 737 MAX 8 aircraft led to the grounding of hundreds of jets for nearly two years. The FAA began increasing its oversight of Boeing's manufacturing and the company had to pay billions to compensate airlines
due to the MAX grounding and problems that emerged
with other aircraft. – It slowed everything down. It took up resources, it took up time. And so Boeing arguably
wasn't able to focus on developing the next new aircraft in a way they could have been.

– [George] Fast forward to 2023, and Boeing now has a far
narrower selection of planes than European rival Airbus, who's offering ranges
from the 100-seat A220, all the way up to the massive A350-1000. Airbus also has the A321NEO, which can fly a greater
number of passengers farther than Boeing's 737 MAX 10, a plane which still isn't certified because of delays related
to the MAX crisis.

And that's partly why
Airbus, who overtook Boeing as the world's largest
plane maker in 2019, was able to post record orders in 2023, far outstripping Boeing's orders. – And there's a question here. Does this difference between the orders speak to maybe the fact that Boeing's management are distracted? You know, they're focused on other things. Where Airbus is able to go out there and just focused on winning orders and, you know, working with customers and being able to deliver a
more nuanced product lineup that can really take away some of the market share that Boeing has. – So even though the plane landed safely, could the Alaska Airlines
incident disrupt the duopoly between Boeing and Airbus in the long run? Well, both Airbus and Boeing have huge manufacturing backlogs.

So Airbus is unlikely to
gain much of an advantage in the short term. – They're pretty much
sold out for the next, you know, eight to nine years. If you wanna buy a big chunk
of new orders from Airbus, you're really looking at the early 2030s before Airbus can even
start delivering them. – And handling the MAX crisis
may have made Boeing better at dealing with its current woes. – We're seeing the company already start to do things differently. They've said that they will
open their factories up to airlines if the airlines
wanna send crews in to inspect the process. – But how Boeing goes
about restoring faith in its products and its manufacturing over the next few months could dramatically reshape the
company in the years to come. – If they're able to
come back very strongly, confident in the fixes, show that they have, you know, not only addressed the underlying issues, but manage to win back the confidence of the global industry,
maybe this is just a blip. – But if there's a lack
of faith in the company and its products, we
could see Boeing's orders and its position in the market, start to slip further in the long run.

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