Boeing shares lift after CEO Dave Calhoun addresses Alaska Airlines incident
Boeing boss Dave Calhoun’s comments about the need to acknowledge its “mistake” after a door-plug failure on an Alaska Airlines flight has fired up investor support.
Shares in Boeing lifted in US trading overnight after chief executive David Calhoun said the company needs to acknowledge its “mistake” following a mid-air, door-plug failure on a recent Alaska Airlines flight.
The incident, which is still being investigated, has resulted in roughly 170 of its planes being grounded and spooked its customers.
In his first remarks since the harrowing accident this week, Mr Calhoun indicated a misstep by the aircraft maker played a role.
“We are gonna approach this – No. 1 – acknowledging our mistake,” Calhoun said on Tuesday (US afternoon) in an address to employees just days after the incident on the Alaska Airlines flight.
“We’re gonna approach it with 100 per cent and complete transparency every step of the way,” he said. “We are going to work with the [National Transportation Safety Board] who is investigating the accident itself to find out what the cause is.”
He didn’t specify what mistake he was referring to, and other executives who spoke cautioned against speculation.
Mr Cahloun’s first comments since the incident saw Boeing’s shares close 0.9 per cent higher at $227.84 in overnight trading - after spiking as much as 2 per cent - marking a recovery from its declines this week.
Boeing declined to elaborate. The Journal reviewed audio of their remarks at an all-hands meeting at the 737 factory in Washington.
Regulators have grounded about 170 Boeing 737 MAX 9 planes since Saturday after a door plug detached from a MAX 9 jet at 16,000 feet, leaving the plane flying with a gaping hole. United Airlines and Alaska Airlines said they have found other MAX 9 planes with loose parts as they check the grounded fleet.
No Max 9s currently operate in Australia, although Virgin Australia and Bonza both fly 737 Max 8s which returned to service in late 2020 after being grounded for almost two years due to safety issues.
Boeing executives said airlines are shaken by the incident.
“Moments like this shake them to the bone, just like it shook me,” Mr Calhoun said in the meeting. “They have confidence in all of us – they do – and they will again.”
He said Boeing engineers are poring over information in search of clues of what went wrong.
Officials at the NTSB are still investigating the cause of the incident, and have said it is too soon to determine whether a manufacturing flaw might have led to the Alaska plane’s blowout.
On Monday, they said that four bolts designed to keep the door plug from moving off the stops were missing, adding that they would work to determine whether the bolts had ever even been installed.
Mr Calhoun, a former Boeing chairman and GE executive, took over as Boeing’s CEO at the start of 2020 when the company was enmeshed in a prior crisis over a smaller version of the plane, the MAX 8.
The MAX 8 was grounded for about two years after a pair of crashes in 2018 and 2019 that killed 346 people. Those accidents were blamed on a faulty flight control system that sent the planes into fatal nosedives and not related to door plugs.
After the earlier MAX crashes, Boeing faced criticism from US lawmakers and regulators over disclosures related to the aircraft’s certification.
The Justice Department tried a former Boeing pilot on charges he misled the FAA. A jury acquitted him.
In the wake of the latest incident, Boeing executives have scrambled to reassure airlines about the safety of its planes and are working to develop an inspection process so that grounded planes can be cleared for service.
The Federal Aviation Administration said this week that Boeing was revising its instructions and the regulator still hasn’t signed off on the process so the planes will remain grounded.
Calhoun said lessons derived from the incident will help improve aviation safety.
“MAX has been on a journey – no doubt about it,” Mr Calhoun said, alluding to problems other aircraft types have experienced. “We work our way through them — we do it diligently.” Boeing director David Joyce, who chairs the board’s safety committee, said the panel met on Saturday and would be following the investigation closely as it proceeds, getting regular reports from Mr Calhoun and other top company leaders.
The loose hardware found by United and Alaska after the accident are the latest in a series of quality problems that have surfaced in various types of Boeing commercial and military aircraft in recent years.
Boeing has sought to improve how it approaches safety, engineering and production after the earlier MAX crashes.
Boeing commercial airplanes chief Stan Deal said this week the plane maker didn’t know whether the recently discovered defects had any links with the latest accident.
“We build the airplane and we have to own it,” Deal said. “We’ve come a long way in this journey, but we’re not at an end.”
Sharon Terlep contributed to this article.
– The Wall Street Journal
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