Analysis: Airline Execs Are Losing Faith In Boeing’s Promises

Five years and counting into a crisis that is starting to seem less like a bad stretch and more like a new normal, it’s fair to assume designing the next great airliner—or any airliner—is nowhere near the top of Boeing’s priority list.

Instead, Boeing is focused on the basics: Build airworthy aircraft with minimal, cost-inducing pre-delivery rework. Catch inevitable quality mistakes before aircraft are in customers’ hands. Meet contract delivery targets (or at least come close). And do so consistently.

Never mind losing a full-year order tally or backlog size comparisons to Airbus; Boeing is instead working to win back trust from industry stakeholders.

Start with the FAA. The agency’s eight-week audit of 737 MAX production, prompted by the Jan. 5, in-flight loss of an Alaska Airlines’ MAX 9 door panel, found “numerous” violations of Boeing procedures and FAA rules and gave the company 90 days to come up with a plan to correct the issues.

In the meantime, the agency placed a de facto production cap on 737 MAXs by not permitting more than 38 deliveries of newly built aircraft per month (excluding those from inventory).

Boeing’s long-term plans, laid out during a November 2022 investor event, call for the company to be producing 50 per month, sometime in 2025-2026. CFO Brian West admitted the latest challenges will likely push that target even further.

Let’s face it, the 737 MAX delivery cap is largely for show. Boeing hasn’t demonstrated it can crank out more than 25-30 737s per month consistently since the MAX grounding started in March 2019, despite Boeing saying in July 2023 that the transition from 31 to 38 per month was underway and telling suppliers to target the mid-40s by mid-2024.

The Boeing 787 hasn’t fared much better. Despite a July 2022 FAA-approved plan to ensure aircraft coming off the line conform to Boeing’s design specifications—something that shouldn’t need revisiting 1,000 aircraft into a production run—output has stalled at below Boeing’s five-per-month target because of what the company says are external supply-chain issues. This means still more 787 delivery delays.

Operators don’t have many options. Lessors may have some available aircraft in the coming years, but Airbus doesn’t. A conflation of confidence in their product line, demand for new lift, and Boeing’s steady slide have filled Airbus’ delivery slots for years, particularly in the ultra-competitive narrowbody space. Sticking by Boeing is the only viable choice for many airlines and lessors. But the company’s mounting, largely self-inflicted challenges mean fewer are sugar-coating the mess Boeing has gotten them into.

“I can’t tell you if they’re making progress or not because it’s all actions that matter, not words,” American Airlines CEO Robert Isom said during the carrier’s April 25 earnings call. “We’ll do everything we can to support Boeing. We need them to be successful in the long run. But as I’ve said before, we’re going to make sure that we’re protected.”

American, which saw its summer 2023 long-haul plans disrupted by 787 delivery delays, is hardly alone. In late 2021, Southwest Airlines, the MAX 7 launch customer, said it expected to have more than 70 of the new, small MAX family variants by 2023. Not only is Southwest still waiting for its first MAX 7 delivery, but the variant wasn’t even certified as of early May. So instead of modernizing its fleet and maintaining growth plans, Southwest is parking as many older aircraft as it can spare and hoping Boeing can build more of the MAX 8s the carrier has on order sooner.

“While we remain committed to our fleet modernization, we feel it is prudent to retain some flexibility until we have better certainty around our aircraft deliveries and around the certification of the MAX 7,” Southwest CFO Tammy Romo said during an April 25 earnings call.

At least the MAX 7 has completed all FAA-required flight testing, which is more than can be said for the MAX 10 and the new 777-9. The MAX 10, the largest MAX variant, seems destined for a post-2025 debut. But Boeing maintains that the latest iteration of its highly successful 777 family, the 777X, will see both certification and first deliveries by the end of 2025. Type inspection authorization (TIA)—regulatory-speak for the go-ahead to conduct required flight testing—is the next big milestone for each. The lack of TIA combined with FAA scrutiny of all things Boeing suggests that 2025 is naively optimistic. Lufthansa Airlines CEO Jens Ritter said as much when he told media he expected the 777-9 “will be here for the summer timetable 2026 at the earliest.”

As for those November 2022 plans focused on recovery and steady progress by 2025-2026? Boeing is standing by them.

“Boeing told us they’re getting on the right path when they recertified the MAX to go back in operation [in late 2020],” Air Lease Corp. executive chairman Steven Udvar-Házy said at a J.P. Morgan investor event in March. “Since then, we’ve seen cascading events of delays, complexities, nonconformities, quality problems. So, we haven’t seen the kind of progress that Boeing promised us.”

Will that change?

“I think they have no other solution now but to correct their imperfections,” Udvar-Házy offered.

Arguably commercial aviation’s most influential aircraft purchaser, Udvar-Házy sounds like he’s ready to trust Boeing again. At the same time, he acknowledged ALC is anticipating delivery delays across its order book into 2029. Words only carry so far.

Hear more on this subject as the author and other Aviation Week editors discuss Boeing’s production challenges on the Aviation Week Check 6 podcast here: https://bit.ly/4b1DRd4.