After years of chaos, Boeing seems to be seeing the end of the tunnel

(Farnborough) From the accidents of the 737 MAX to the mishaps of its jumbo jets, Boeing is struggling to emerge from the worst crisis in its history. On the first day of the Farnborough Air Show (UK) on Monday, the American giant tried to impress by signing big deals.

Updated yesterday at 11:12am.

Daniel HOFFMAN
Media Agency France

The American company Delta initially placed a firm order for 100 models of the Boeing 737 MAX 10 medium-haul aircraft, which according to the list price corresponds to a value of 13.5 billion dollars. The agreement also includes an option to purchase thirty additional aircraft.

Japanese airline ANA’s stake has confirmed the purchase of twenty MAX 8s ($2.4 billion at list price) with an option for ten more aircraft. The contract was already in Boeing’s order book, but the buyer had not been announced.

“We pride ourselves on the quality of our customers and their ability to do business,” said Boeing CEO Dave Calhoun, who was interviewed on CNBC after the announcement.

For Mr. Calhoun, the order from Delta, the last major American company to buy MAXs, is a sign of renewed confidence in Boeing’s flagship.

The group wants to prove that the setbacks of the device, which was grounded for 20 months from March 2019 to December 2020, are behind it after two fatal crashes.

Since returning to the skies of MAX, Boeing has attempted to make amends with American authorities and regulators, partially acknowledging its responsibility for the accidents and paying billions of dollars to settle the lawsuits.

However, the MAX and other Boeing models remain weakened by global supply chain disruptions, staff shortages and the Ukraine crisis, which could impact increased production rates. Boeing currently builds an average of 31 MAXs per month.

The fate of the MAX 10, the largest and newest medium-range version, rests in the hands of the US Congress, which must decide by the end of December whether to grant an exemption to a law mandating new standards for the crew alarm system.

Mr. Calhoun hinted in a recent interview with Aviation Week that the company could lose the MAX 10 if it doesn’t receive a waiver or certification by the end of the year.

A lack of certification would mean additional training for pilots and make the model more expensive for companies that might turn away from it.

However, on Monday, Mr. Calhoun assured CNBC that Boeing intends to “take his case” and be “persuasive.”

– Accumulation of fees –

In the widebody market, most deliveries of the 787 Dreamliner have been frozen since manufacturing defects were discovered in the summer of 2020. Certification of the future version of the 777, the 777X, has again been pushed back to 2025 to meet regulatory requirements.

“If you’re not producing, it’s difficult to get orders,” Stan Deal, president of Boeing’s commercial division, said of the 787 in London on Sunday.

With 51 aircraft delivered in June (including 43 MAX), Boeing still had its best month since March 2019.

Not yet recovering from the pandemic, the company piled on burdens (war in Ukraine, Air Force One presidential plane contract renegotiation, etc.) in the first quarter and its debt was nearly $58 billion at the end of March.

“Financially, the company is not taking any existential risks,” assures Michel Merluzeau of the specialist company AIR, which considers certain programs, particularly in the defense sector, to be profitable in the long term.

This is, according to the expert, the case with the KC-46 military tanker or the MQ-25, the US Navy’s future tank drone.

Boeing also has ambitions in the conquest of space. His Starliner capsule, designed to transport NASA astronauts to the International Space Station, passed a key test in late May after many adventures, but faces SpaceX, Elon Musk’s company.

What remains is the question of the launch of a new model intended to fill the market segment between MAX and 787 and to compete with the Airbus A321, especially its very long range.

Dave Calhoun buried an NMA (New Midsize Aircraft) project in early 2020, but many observers believe Boeing could relaunch it or risk giving up too much market share to its European rivals.

Leave a Comment