Boeing Co. BA has announced plans to implement design changes aimed at preventing future mid-air cabin panel blowouts.
What Happened: Boeing intends to make design alterations to prevent mid-air cabin panel blowouts, such as the one that occurred on an Alaska Airlines 737 MAX 9 flight in January, Reuters reported on Wednesday.
This incident led to a series of repercussions for Boeing, including a temporary grounding of the MAX 9, a halt on production expansion by the Federal Aviation Administration (FAA,) a criminal investigation, and the departure of several key executives.
Boeing’s senior vice president for quality, Elizabeth Lund, revealed the company’s plans for design changes during a National Transportation Safety Board (NTSB) hearing.
“They are working on some design changes that will allow the door plug to not be closed if there’s any issue until it’s firmly secured,” Lund said.
The NTSB hearings are also addressing other critical issues, including 737 manufacturing and inspections, safety and quality management systems, and FAA oversight.
Why It Matters: The recent incident has put Boeing under significant scrutiny, with the NTSB raising questions about the company’s safety practices and the FAA’s oversight of Boeing. The FAA’s oversight of Boeing has also come under fire, with the agency admitting to being “too hands off” before the accident, according to the report.
Boeing’s stock has been experiencing turbulence, with a 15% revenue decline reported in the second quarter of 2024. However, analysts have expressed optimism about the company’s future, with Goldman Sachs predicting a free cash flow surge post-2024, driven by production and a new CEO.
Despite these challenges, Boeing is making significant changes, including the appointment of a new CEO, Kelly Ortberg, and a predicted delivery growth in the near future.
Price Action: Boeing stock closed at $165.04, down 1.19% for the on Tuesday. In after-hours trading, the stock declined a further 0.27%. Year to date, Boeing has experienced a significant drop of 34.45%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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