Boeing faces backlash from airline bosses

Airline bosses have lashed out at Boeing for a series of safety and production problems: loose bolts, a discarded wrench found under the floorboardsdelayed shipments, as scrutiny of the company’s manufacturing processes intensifies.

“I’m angry,” said Ben Minicucci, CEO of Alaska Airlines. told NBC News Tuesday after the airline found “many” loose bolts while checking its fleet of Boeing 737 Max 9 planes after a door plug detached from one of the planes midair on Jan. 5. “My demand to Boeing is what are they going to do to improve their quality programs internally?

After the incident, the Federal Aviation Administration grounded about 170 Max 9 planes until they were inspected and said it would investigate whether Boeing failed to ensure the plane was safe.

Scott Kirby, CEO of United Airlines, he told CNBC Tuesday that the grounding of the Max 9 was “probably the straw that broke the camel’s back for us.” He also criticized delays in production of another Boeing plane the airline had ordered, the Max 10, saying he doubted the planes would be delivered soon.

“At least we’re going to build a plan that doesn’t include the Max 10,” Kirby said.

It’s a rare escalation: Airlines and their manufacturers often enjoy a symbiotic relationship, and airlines often compete with each other to place orders for new planes, which can have years-long waiting lists. Along with European planemaker Airbus, Boeing makes most of the world’s commercial airplanes, limiting options for airlines looking for new planes.

“Boeing’s maintenance and production failures in recent months have been unprecedented, so it is no surprise that airlines are beyond frustrated and engaging in unprecedented behavior,” said Xavier Smith, director of energy and industrial research at AlphaSense.

But at this point, criticizing Boeing may be the most CEOs can do to vent their frustration without fueling panic about airplane safety.

Jonnathan Handshoe, airline analyst for CFRA Research, said the public reprimands amounted to reassuring passengers that airlines were concerned about safety and impressing on Boeing the seriousness of the crisis.

“It’s more like, ‘Hey, we’re getting your attention. This is a problem. needs to be fixed because clearly there are quality control issues,’” Mr. Handshoe said.

Stan Deal, chief executive of Boeing’s commercial aircraft unit, said in a statement Tuesday that the company had “disappointed our airline customers” and was “deeply sorry for the significant disruption to them, their employees and their passengers.”

Handshoe said that, in theory, airlines could cancel large orders for new Boeing planes (United placed an order for 50 Boeing 787 Dreamliners in October and a year earlier said it planned to buy 100 by 2032), but given headwinds and existing market constraints, it is not unlikely to do so.

United, like other airlines, is trying to upgrade its fleet with more fuel-efficient planes. Since the FAA ordered the grounding of the Max 9, airlines have been forced to use older, less fuel-efficient fleets. That has increased their fuel costs, Handshoe said, even as the cost of jet fuel has declined in recent months.

Another problem is that the FAA order has reduced airline fleets at a time when they are trying to expand. Decreased capacity has raised costs, which have been passed on to consumers.

The limitations also increase for a company like Alaska Airlines, which has a smaller fleet, which it has tried to expand with a proposed purchase of Hawaiian Airlines for $1.9 billion.

Since the Jan. 5 incident, Boeing shares have fallen more than 13 percent, while Alaska’s have fallen 5 percent.

Some airline executives have avoided criticizing Boeing, going so far as to express confidence in the manufacturer.

“Boeing is critical to our industry,” Delta Air Lines CEO Ed Bastian said during a Jan. 12 appearance on CNBC. “It’s critical to our economy and they’ll figure it out,” he said. Delta, he noted, does not fly either the Max or the 787.

Dave Calhoun, who became CEO of Boeing to turn the company around after the fatal Max crashes in 2018 and 2019, is meeting this week with senators including Maria Cantwell, Democrat of Washington and chairwoman of the Commerce Committee. Ms. Cantwell said last week that she planned to hold hearings on the merits of Max 9.

Boeing’s problems could have a lasting impact. Mike Leskinen, United’s chief financial officer, told analysts that the shutdowns would hurt growth in “the country.”next years.” Michael O’Leary, chief executive of Ryanair, a European low-cost airline that is one of Boeing’s largest customers, also have doubts that the Max 10 will be delivered soon.

Mark Walker contributed reports.