Boeing's Recent Struggles

26 March 2024


Summary

  • Boeing has faced major setbacks in recent years, headlined by the 737 MAX crashes costing the company billions. 

  • The company's culture has come under scrutiny, with accusations that cost-cutting and careless oversight contributed to engineering and safety lapses, especially with the recent engineering flaws after the pandemic.  

  • Boeing must rebuild trust with airlines, regulators, captains and the flying public to recover.  


As one of the world's leading aircraft manufacturers, Boeing has struggled to maintain its reputation. This came with the crash of two Boeing 737 MAX jets in 2018 and 2019 which killed 346 people and exposed serious flaws in the plane's design and certification. This led to a two-year worldwide grounding of the 737 MAX, costing Boeing over $20 billion. Beyond the financial hit, the crashes severely impacted Boeing's reputation for engineering and safety. This was because the investigations revealed that a faulty flight control system, the MCAS, was to blame for both crashes. Critics argue that this reflected a cultural shift in the company, with emphasis on cost-cutting and accelerating production over quality engineering. This was emphasised by Long-time engineers who highlighted how Boeing was beginning to lose its commitment to safety-first principles. 

 

As the MAX crisis unfolded, Boeing then began facing production issues with other aircrafts including the 787 Dreamliner. Compounded by the COVID-19 pandemic which decimated travel demand during 2020. Boeing was forced to slash production and lay off over 10% of its workforce. Now with Boeing’s more recent events including an emergency door coming off during flight, wheels detaching during take-off, and another aircraft losing its flight panel, people have been put on high alert when getting on an aircraft manufactured by Boeing. This has caused certain airlines like Qantas to retire their planes as many captains continue to come forward to say that they struggle to control some of the aircrafts like the Boeing 737 MAX. With all of this, it is important to identify whether Boeing will be able to recover or will it continue to sink in its crisis. 


Forecast

  • Short-term: Boeing will likely undergo structural changes within the company, especially as airlines move away and seek partnerships with other manufacturers. Boeing will also need to address and rectify its damaged reputation among key stakeholders, such as captains who use their services. 

  • Medium-term: Boeing will likely invest to fix 787 production defects and ensure future programs avoid MAX-type design flaws. The company will need to priorities safety and quality control to restore confidence in its products. 

  • Long-term: Winning back its reputation as a leader in safety and quality will be crucial for Boeing's competitiveness. This means fostering a culture of transparency, investing in its engineering workforce, and being proactive with regulators. Although financially weakened, Boeing is likely to maintain its duopoly position in the commercial aircraft market, given the high barriers to entry. Developing greener, more fuel-efficient planes will be key to Boeing's long-term success. 

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