Boeing's disastrous 2019 - A Year in Review
A new year, a new Boeing? After what was a nightmare of a year, Boeing finished their disastrous 2019 with a 1% increase in stock, despite numerous mishaps, executive shuffling, Capital Hill hearings and a still grounded fleet of 737 MAX aircraft. From a worldwide trusted manufacturer, involved with decades of delivering state-of-the-art products to customers worldwide, Boeing's reputation has hit an all-time low.
The absolute hot topic which lead to Boeing's 'downfall' was the two crashes of Ethiopian and Lion Air 737 MAXs. In quick concession, these two tragic accidents opened up the conversation that the 737 MAX was an unsafe airplane, allowing doors to open to investigate Boeing's designs and engineering on the MAX. Both crashes were suspected to be by the same cause, a faulty Maneuvering Characteristics Augmentation System (MCAS) which caused the aircraft to correct its pitch. That correction was unable to be stopped, resulting in a violent crash.
After more investigation into Boeing, it was revealed that people within the company expressed doubts in the MCAS system, however, were over looked. It begs to question what intentions the company had, short term gain? or long term gain? Boeing was under pressure to create an aircraft to compete with Airbus's new NEO series. Boeing rather then bringing up an entirely new design, re-visited their best selling 737 series giving it some new updates. However, now that we know, this decision ended up coming back on them pretty badly.
Fast forward, Boeing's then chief executive officer (CEO) Dennis Muilenburg was questioned on Capital Hill about many things, including company culture, faulty engineering, ignorance on MCAS warnings and many more topics. Boeing was feeling the pressure and towards the end of 2019, relieved Dennis Muilenburg from his duties as CEO.
Among the 737 MAX grounding and on-going debacle, Boeing also suffered from mishaps regarding some of their other products, including the new 777X, 787 Dreamliner and 737 next-generation (NG) series. The 777X, suffered a setback during high-pressure stress testing on the ground when one of the airplane’s doors exploded outward. This happened during one of the final tests that must be passed during the aircraft certification process. The 777X program is still delayed due to a problem with the GE-9X engine that will power it. In July, Boeing's then CEO Dennis Muilenburg revealed on a quarterly earnings call that the first 777X intended to fly, which rolled out of the Everett factory in March, won't happen now until sometime this year. The discovery of 737 NG cracking by Qantas comes a month after Boeing discovered the cracking problem in the 737NG, prompting the U.S Federal Aviation Administration to advise airlines to investigate their fleet. Thousands of 737NG planes are in service globally. While the next issue doesn't directly involve Boeing, it still haunts their 787 Dreamliner program.
Rolls-Royce, whose engines power the 787, said on Friday it had sped up turbine blade replacement for some models, leading to additional removals and delaying a reduction in the number of grounded aircraft to single figures until the second quarter of 2020. The Rolls-Royce Trent 1000 TEN is the latest version of an engine that has had a problematic entry into service. As of late February 2019, Rolls-Royce said 35 787s were grounded globally due to engine blades corroding or cracking prematurely.
Despite all these issues resulting in a really rough year, Boeing still had a 1% increase in stock.
Can Boeing repair their reputation and make a comeback? You decide.