Boeing saw a drop in airplane deliveries in the first quarter of the year, with 83 planes handed over compared to 157 in the prior quarter. This comes following increased scrutiny after a door plug blew out from one of its 737 Max 9 planes midair in January. The Federal Aviation Administration has inspected Boeing’s 737 Max production and barred the company from increasing output of the jets until quality control procedures are signed off on.
Despite the delivery drop, Boeing customers are still ordering new jets from the manufacturer. In March alone, the company logged orders for 111 new planes, with 85 of them being 737 Max aircraft for American Airlines. The company and Airbus continue to dominate the large jetliner market. However, Boeing is taking steps to slow down production in order to improve quality control and avoid delays caused by issues such as traveled work, where repairs or tasks occur out of sequence.
Boeing executives have indicated that they are intentionally slowing down production to ensure quality and are maintaining rates on the 737 program below 38 per month until they feel confident in the processes. The company is set to provide an update on their first-quarter results and plans for the future on April 24. CEO Dave Calhoun announced last month that he will be stepping down by the end of the year, in the wake of criticism from some of Boeing’s biggest airline customers.
The incident on Alaska Airlines Flight 1282 in January highlighted safety concerns related to Boeing’s production process. Federal accident investigators found that the door plug that blew out was missing bolts that hold it in place, bringing Boeing close to a potential catastrophe. In response, the company is working on improving its quality control procedures to prevent such incidents from occurring in the future.
Alaska Airlines announced that it received $160 million in compensation from Boeing in the first quarter as a result of the brief grounding of the plane after the accident. This highlights the financial impact that production and safety issues can have on airlines and manufacturers. Boeing’s recent changes in leadership, including the replacement of the board chair and the head of the commercial airplane unit, indicate a broader effort to address concerns and regain trust from customers and regulators.
