Boeing's Plans For Revival Might Face Serious Roadblock As US Grounds 737 Max 9 Fleet: 'It's Going To Be A Problem Selling Airplanes - If It Isn't Already'

In a string of recent incidents, Boeing Co. BA is now facing another potential roadblock to its revival as the U.S. grounded over a hundred Max 9 airplanes. This follows the Alaska Airlines incident where a door-shaped panel was ripped off a 737 Max 9 airplane during its ascent.

What Happened: Bloomberg reported that the incident has raised questions about the stability of Boeing’s CEO, Dave Calhoun, and the company’s relationship with its primary supplier, Spirit AeroSystems Holdings Inc., which could face further scrutiny.

On Jan. 5, a door-shaped panel blew off a 737 Max 9 as the plane ascended from Portland, Oregon. Following the incident, regulators immediately grounded 171 planes of this type, including the entire U.S. fleet. While no serious injury was reported, regulators and the company are working to determine the cause and put in place necessary inspections before resuming the Max 9 fleet.

Calhoun has canceled Boeing’s annual senior leadership retreat, which was due to begin on Monday, and called an all-hands meeting for Tuesday, which will be webcast from the company’s 737 factory.

See Also: Chinese Airlines Resume Operations of All Boeing 737 MAX Jets Ending Global Grounding Since 2019

Calhoun had previously warned that the road to a brighter future would be bumpy and that issues would arise along the way.

However, analysts warn that the frequency and severity of these issues could impact the company’s ability to stabilize its factories and sell its aircraft.

Bloomberg Intelligence analyst George Ferguson said, "If Boeing doesn't get its factories stabilized, it's going to be a problem selling airplanes — if it isn't already. You've got to have zero defects all the time. That's the business."

"In the background of this, there is a bad need for cultural changes that put senior corporate management more closely in touch with the design and manufacture of aircraft,” said Richard Aboulafia, managing director at AeroDynamic Advisory.

Why It Matters: The recent incident adds to the series of setbacks Boeing has faced in recent years, including the 737 Max crashes in 2019 that severely impacted the company’s reputation. This latest incident could further delay Boeing’s plans to increase its 737 manufacturing pace for the year.

In 2019, Boeing faced the blow of two 737 Max crashes in Indonesia and Ethiopia that led to the death of over 300 people and the worldwide grounding of the 737 Max fleet. This led to a lengthy court battle, with multiple civil lawsuits from the families of the victims of both crashes.

The latest incident of Boeing also comes just days after China resumed operating 737 Max jets in December 2023, thus ending the global grounding.

Photo Courtesy: Tada Images On Shutterstock.com

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.