Ultimately, Congress is responsible for mess at FAA, Boeing, Spirit, et al

Editor’s note: Mondays are ordinarily paywall days. Because of the nature of this topic, today’s article is a freewall post.

By Scott Hamilton

Commentary

The Alaska Airlines Boeing 737-9 MAX that was involved in the Jan. 5, 2024, accident. The door plug for this emergency exit blew off the airplane during climb out from the Portland (OR) airport. Nobody died and injuries were minor.

Feb. 26, 2024, © Leeham News: There’s no getting around the culpability of the Federal Aviation Administration (FAA), Boeing, and Spirit AeroSystems in the current 737 MAX mess. Nor was there any doubt about the culpability of the FAA and Boeing in the first MAX crisis in 2018-2019.

But let’s face it: Ultimately, Congress is where the buck stops. Because Congress for decades failed to appropriate the bucks needed for the FAA to do its job without overreliance on Boeing or Spirit.

Shifting oversight responsibilities and diminishing the FAA’s role may well have been the result of effective lobbying by Boeing and others in the aerospace industry. Congress could have rejected changes to laws governing the FAA’s oversight authority in favor of Boeing and other aerospace companies.

So, it’s Congress, once again, that is ultimately culpable.

Let’s not be naïve. There is no way Congress or Members of Congress will step up to assume responsibility for the mess the US commercial aviation industry sees itself in today.

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Part 2: Reconstituting Boeing’s ODA system

By the Leeham News Team

Analysis

Feb. 21, 2024, © Leeham News: In part one, LNA looked at the Organization Designation Authorization, more commonly known as the ODA, what it is, and why it is so important to industry.

The ODA is an organization that is granted the privilege to operate as the Federal Aviation Administration (FAA) on selected work package types. ODAs are composed of “unit members,” the FAA term for people doing ODA work.

Boeing and many other aerospace companies in the US use ODAs. Airbus uses similar people under a different designation issued by EASA, Europe’s regulator. Boeing’s ODA authority was restricted by the FAA in the aftermath of the 737 MAX crisis that led to the 21-month grounding of the global fleet.

The FAA is reconsidering Boeing’s ODA authority.

There are two types of unit members: Designees and others who do ODA work without formal FAA signature authority.

Credit: Federal Aviation Administration.

An example of how a Type Certification (TC) ODA organization uses these two different talent pools can be seen through the Certification process where detailed analysis done by the group is approved (signed off) by an ODA unit member who is a Designee. The FAA suspended Boeing’s “ticketing authority” for the 737 and 787 following the MAX crisis and quality concerns on the 787 production line. Ticketing authority is one ODA mission.

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Make the fix on Boeing 737-9 door plug fail-safe

By the Leeham News Team

Commentary

Four missing bolts were the reason the emergency exit door plug separated from a Boeing 737-9. The inspections-and-repair edict from the FAA may not be enough for a fail-safe fix. Credit: NTSB.

Feb. 20, 2024, © Leeham News: Four missing bolts on an emergency exit door plug leg to the in-flight decompression of Alaska Airlines Flight 1282 on Jan. 5 of this year.

It’s not yet clear why the four locking bolts were not installed in the incident aircraft, a Boeing 737-9.

Information revealed to date by the National Transportation Safety Board (NTSB) discovered that Boeing removed the door plug in an unplanned process when some defects were discovered with some rivets. When Boeing line workers reinstalled the plug, for reasons as yet unknown, the four retaining bolts were not reinstalled. The bolts became separated from the plug during the removal. So far as is known, the four bolts never have been found in the factory. The NTSB’s investigation continues.

The Federal Aviation Administration (FAA) grounded the MAX 9s for three weeks while inspection and repair procedures were prepared, approved, and implemented. Inspections were expanded to the MAX 9’s predecessor, the 737-900ER, which had the same door plug. No grounding was required of the -900ER.

Although the processes solved the concerns over all MAX 9s produced to date, the question arises whether the procedures are sufficiently fail-safe going forward.

The inspection of the fleet to verify the correct installation of the lock bolts appears to leave a gap for future production, unplanned plug removals, and reinstallation.

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Ryanair, Southwest, United take biggest hit from FAA cap on 737 MAX production

By Scott Hamilton

Feb. 16, 2024, © Leeham News: When the Federal Aviation Administration (FAA) put a freeze on Boeing 737 production rates at the currently approved 38/mo level, LNA revealed that hundreds of orders will face delivery delays. Boeing faces even greater delays than the 38/mo production level suggests, however.

As LNA reported, and confirmed by several aerospace analysts, Boeing’s true production rate for the 737 was 31 per month and even lower—as little as around 20 per month in some periods. The balance of deliveries came from its large inventory of 737 MAXes built during the first nine months of the 21-month grounding of the aircraft.

With Boeing’s full year 2023 delivery data now available, LNA looked at 2024 deliveries that were planned before the Jan. 5 Alaska Airlines 737-9 MAX emergency door plug blew off Flight 1282 on climb out from Portland (OR).

The incident was characterized as an accident due to the nature of the event and damage to the airplane. Nobody died and there were only minor injuries. The decompression at about 16,000 ft. damaged the door surround at row 26 on the left side. The door plug separated from the airplane and was found in a wooded area a few days later. There was damage throughout the 737’s cabin and the cockpit door was ripped off its mountings.

The pilots landed the airplane a few minutes later in Portland.

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Airbus should tread carefully

  • Airbus announces is 2023 earnings on Feb. 15.

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 By the Leeham News Team

 Analysis

Feb. 12, 2024, © Leeham News: United Airlines has reportedly been looking to Airbus to replace the Boeing 737 Max 10s that Boeing is having difficulty delivering, due to the Alaska Airlines accident and the resulting delays in certification to the Max 7, Max 10 & 777X programs. Airbus has been searching for ways to recover/create slots to take on a premium customer and poach them from Boeing.

A320 production rates are headed towards 75 a month in the 2025/2026 time frame, with Airbus confident that its supply chain can meet the demand and will commit to the rate for the long term. These are record production numbers with the previous high-water mark reached in 2019 with 863 total deliveries: 642 of those from the A320neo family, or 54 a month. The A220 program is also headed for an increased production rate of 14 a month at about the same time.

However, Airbus has its own kinks to work out, along with concerns outside its control:

  • Geared Turbofan (GTF) on wing engine issues from supplier Pratt Whitney.
  • The A220 & A330Neo lines aren’t selling as well as they’d like to
  • 2024 US presidential election could really upend the apple cart.
  • Another Max accident would be a bad thing, even for Airbus (more below).

There has been speculation and calls for Airbus to push the envelope even more, reaching 90 a month to offset the Boeing shortcomings.

75 & 14 a month are already huge goals and pushing suppliers to go past those targets might compromise quality. People will cut corners when they are greedy. Besides, a little scarcity when you are the top dog isn’t the worst thing; Boeing isn’t coming to the party with anything new in the near future.

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NTSB confirms door plug bolts were missing on Boeing 737-9 MAX

By the Leeham News Team

Feb. 7, 2024, © Leeham News: The National Transportation Safety Board (NTSB) yesterday issued its preliminary report on the Alaska Airlines Flight 1282 structural failure on Jan. 5 this year. (A link to the report is below.)

The emergency exit door plug separated from the two-month-old Boeing 737-9 MAX due to faulty installation, the National Transportation Safety Board confirmed.

A door plug on an emergency exit on a two-month-old Boeing 737-9 MAX blew off the airplane as it passed more than 16,000 ft shortly after takeoff from Portland (OR). Nobody was killed and only a few injuries occurred. The flight crew made an emergency landing in Portland a few minutes later.

Within days, the focus for the incident landed on Spirit AeroSystems, which makes the fuselages and installed the door plug, and on Boeing, which completed final assembly at its Renton (WA) 737 plant. Quality assurance, or “quality escape” in aviation jargon, was suggested to be issues at Spirit and Boeing.

LNA’s Bjorn Fehrm quickly concluded that four bolts meant to hold the door plug in position after installation were missing. The bolts are designed to prevent the plug from moving upward off flanges that hold the plug in place in the fuselage opening.

The NTSB’s investigation confirmed that these four bolts were missing after Boeing removed and reinstalled the plug to fix a quality escape from Spirit affecting the plug. Boeing employees failed to reinstall the plug.

Removing the plug is not a standard final assembly procedure. It’s called an “unplanned removal.” There is a specified procedure to reinstall an unplanned removal. It appears that Boeing failed to follow its own procedures.

LNA on Jan. 15 detailed the procedures for unplanned removals and reinstallation.


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Boeing’s orders and deferred production costs: a deeper look

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By Judson Rollins

Introduction 

Feb. 5, 2023, © Leeham News: After last week’s release of the 2023 annual report for Boeing, we undertake our annual analysis of at-risk deals on the OEM’s books.

This year, we also look at Boeing’s deferred production costs in light of the well-documented commercial aircraft production issues. During the company’s earnings call, Boeing CEO David Calhoun and CFO Brian West discussed plans to close its “shadow factories” or rework facilities for the 737 MAX and 787. Calhoun said, “In our shadow factories, we put more hours into those airplanes than we do to produce [them] in the first place.”

These growing rework costs appear to be classified as deferred production costs to keep them from affecting Boeing’s announced profits. We explain below.

Summary
  • Program accounting hides ballooning program costs.
  • War and geopolitical tensions increase regional risks.
  • Certification delays to the 737-7 and -10 significantly increase Boeing’s MAX order risk.
  • The 787 order book is relatively healthy despite geopolitical and customer risks.
  • 777 & 777X orders are weighed down by geopolitical issues and a soft cargo market.

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Boeing records loss in 2023, but better than expected results; no guidance for 2024

By Dan Catchpole

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Jan. 31, 2024 © Leeham News: Boeing posted a $5.8B loss in 2023, a substantial improvement over the previous year’s $11B loss. Boeing Commercial Airplanes even posted a $41M profit in the fourth quarter–the first profitable quarter since the beginning of 2019. 

However, any progress made last year was erased on Jan. 5, when a door plug blew out on a two-month-old 737-9 MAX at 16,000 feet over Portland. An empty passenger seat was ripped, but nobody died and physical injuries were light on Alaska Airlines Flight 1282. 

In an earnings report conference call with financial analysts, Boeing CEO David Calhoun said definitively that the accident was Boeing’s fault and that steps are being taken to ensure it never happens again.

Calhoun’s statements echoed similar declarations he made after taking over in 2019 as chief executive amid the MAX crisis following two fatal crashes.

Those crashes put the 737 program under global scrutiny. 

“I’m still trying to get my head around how we got here,” Bank of America financial analyst Ron Epstein said during the call. After the two crashes, “wasn’t the 737 line, like the most scrutinized production line in the world? So, what happened to get to where we got today?”

Summary
  • Boeing withdraws exemption request for 737-7
  • Vague guidance for 2024
  • More mea culpas

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Instead of progress, Boeing must deal with new crisis of Alaska Flight 1282 on Wednesday’s earnings call

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By Scott Hamilton and Judson Rollins

Jan. 29, 2024, © Leeham News: Twenty-twenty-four will be a crucial year for Boeing.

A door plug blew off a Boeing 737-9 MAX Jan. 5. The company must deal with the fallout on its 2023 year-end earnings call Wednesday. Credit: Capt. Chris Brady.

An unexpected twist is the crisis  from Alaska Airlines Flight 1282, in which a door plug blew off a 737-9 MAX at 16,000 ft. Nobody died, and injuries were light. But the MAX 9 fleet was grounded in the US by the Federal Aviation Administration. The FAA launched a formal investigation into the “quality escape” that is believed to have led to the accident. Last week, the FAA put a freeze on current production rates of the 737 and, for now, killed Boeing’s plans to add a line at its Everett (WA) plant.

Beyond dealing with the 1282 aftermath, Boeing hopes this year to clear its inventory of 737 MAXes and the 787. Clearing the inventories brings cash and some profits. But will this move to the right while Boeing is under even more scrutiny by the FAA?

Boeing planned to be positioned for 2025 to pay down debt incurred during the MAX grounding and the COVID-19 pandemic. Progress toward free cash flow targets of $10bn per year by 2025/26 was forecast at its Nov. 2, 2022, investors day. This is almost certainly inoperative.

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Culture key to latest Boeing MAX crisis: panelists

By Scott Hamilton

Special Coverage of the Boeing crisis

Jan. 24, 2024, © Leeham News: What began as a non-fatal accident with an Alaska Airlines 737 MAX 9 on Jan. 5 has blown into a full crisis for Boeing. The company was once considered the gold standard of commercial aviation.

Today, 171 737-9s remain grounded in the US by the Federal Aviation Administration (FAA). There is no end in sight as the FAA and National Transportation Safety Board (NTSB) investigate the accident of Flight 1282 in which a door plug (an inactive emergency exit) blew off the 10 week old Alaska MAX 9 on climb out from Portland (OR).

It is the second time the MAX has been grounded. All MAX 8s and MAX 9s were grounded from March 2019 for 21 months. This grounding only affects the MAX 9.

Evidence points to Boeing quality assurance flaws in final assembly. An anonymous Boeing employee posted on LNA a detailed scenario how Boeing failed its own processes in final assembly of the Alaska plane. (His post follows this article.)

The FAA is booting more inspectors on the ground at the 737 Renton factory. On Jan. 24, Boeing shut down the 737 assembly line for a “safety stand down.” CEOs of Alaska and United airlines, the two US carriers with the 171 MAX 9s on the ground, publicly eviscerated Boeing.


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At the first aviation conference following the Alaska incident, the Aviation Week suppliers event, some speakers called for leadership changes at Boeing.

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