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United Airlines CEO Scott Kirby and Alaska Airlines CEO Ben Minicucci on Boeing plane problems

January 24, 2024
in Business
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United Airlines CEO Scott Kirby and Alaska Airlines CEO Ben Minicucci on Boeing plane problems
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United Airlines CEO Scott Kirby and Alaska Airlines CEO Ben Minicucci on Boeing plane problems

It hasn’t been the best start to the year for Boeing. In early January a panel blew out of one of its aircraft mid-flight, with the carrier Alaska Airlines now saying inspections of their fleet found “many” other Boeing jets with loose bolts.

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But the problems don’t end there. Another of the world’s biggest airlines, United, also said this week it’s weighing a strategy without the 737 Max-10, a model yet to be approved by the Federal Aviation Administration (FAA) due to delays.

The issues have seen Boeing share price tank by some 17% in the first three weeks of the year alone, wiping billions off the company’s market cap.

Litany of problems

The plane manufacturer apologized to customers and passengers following the emergency on Jan. 5, when a panel detached from the body of a 737 Max-9 jet which was carrying 177 people from Portland, Ore. to Ontario, Calif.

But the problems didn’t end with the apology.

In an interview released yesterday, the CEO of Alaska Airlines, Ben Minicucci, told NBC further safety inspections enforced by the FAA had revealed “many” of the the carrier’s grounded Max-9s had loose bolts.

As well as taking the planes out of commission, which has led to hundreds of cancellations, the FAA also announced an audit of Boeing’s production line and and suppliers to ensure the company was operating within its quality metrics.

But Minicucci pushed hard this week for Boeing itself to make pledges to improve standards, saying: “I’m more than frustrated and disappointed. I am angry.

“This happened to Alaska Airlines. It happened to our guests and happened to our people. And… my demand on Boeing is what are they going to do to improve their quality programs in-house.”

The plane which suffered the door plug fault was a new craft, which Minicucci said “makes you mad,” repeating: “It makes you mad that we’re finding issues like that on brand new airplanes.”

Alaska Airlines isn’t taking any chances. Despite placing the onus for improvement squarely with Boeing, Minicucci added his airline is sending its own auditors to Boeing to check their work.

The CEO of the airline—which has a market cap of $4.58 billion—added there must have been a “guardian angel” onboard flight 1282 as no passenger was sat in the seat directly beside the malfunctioning door plug.

“I just want to say how sorry I am for our guests on flight 1282 for what they experienced, which was a terrifying flight,” he continued.

In a statement to Fortune, Boeing Commercial Airplanes CEO Stan Deal said: “We have let down our airline customers and are deeply sorry for the significant disruption to them, their employees and their passengers.

“We are taking action on a comprehensive plan to bring these airplanes safely back to service and to improve our quality and delivery performance. We will follow the lead of the FAA and support our customers every step of the way.”

Boeing did not immediately respond to Fortune’s request for comment.

Max 10 delays

Another issue stacking up in Boeing boss Dave Calhoun’s in-tray is the delayed rollout of the Max-10 jet—the largest model of the 737 plane.

A combination of delays in the delivery of these bigger planes and the grounding of Max-9 jets have earned criticism from the CEO of United Airlines, Scott Kirby. Indeed, in an earnings call on Wednesday United’s CFO Michael Leskinen attributed an expected loss in the first quarter of 2024 to the grounding of the Max-9.

Kirby described the grounding as the “straw that broke the camel’s back” on Tuesday, speaking to CNBC’s Squawk Box, adding: “We’re going to at least build a plan that doesn’t have the Max-10 in it.”

Kirby said the “best case” for when he is hoping to receive the Max-10 is in five year’s time, and like Minicucci appealed to Boeing for answers: “We’re Boeing’s biggest customer in the world, they’re our biggest partner in the world. We need Boeing to succeed.

“I have a lot of confidence in the people at Boeing… but they’ve been having these consistent manufacturing challenges and they need to take action. It needs to be real action.”

Boeing did not immediately respond to Fortune’s request for comment on the Max-10 delays.

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