Why Boeing’s latest 737 Max accident might not lose it much business
Why Boeing’s latest 737 Max accident might not lose it much business
Investigators are continuing to look into why a piece of a Boeing aircraft blew off an Alaska Airlines flight over the weekend. United Airlines found loose bolts on similar 737 Max 9 planes, indicating problems with the aircraft might be more widespread.
This is the latest issue with Boeing’s signature aircraft — problems with a supplier surfaced last summer, and about five years ago, when two 737 Max planes crashed and the aircraft were grounded for over a year. But the company might not lose much business as a result of this accident.
Even before the Alaska Airlines incident, Boeing’s recent record didn’t look great.
“The perception out there in the industry is Boeing has a lot of quality problems,” said John Goglia, an independent safety consultant and a former member of the National Transportation Safety Board.
Those problems are leading to headaches for Boeing’s customers, he said: commercial airlines.
“The customer is spending an inordinate amount of time working through issues that should not have made it out of the factory,” said Goglia.
In a lot of industries, if the product a business relies on isn’t up to its standards, it cancels orders from that supplier. But in the case of commercial jets, it’s not that easy. In part, that’s because the wait for a jet traditionally is yearslong, explained Richard Aboulafia, managing director of Aerodynamic Advisory.
“You want to get your place in line, you might order a plane for delivery in 2028,” he said, “because you fear that, you know, someone else could get there first.
And, in the plane manufacturing industry, there isn’t much in the way of competition. Besides Boeing, European-based Airbus is really the only other game in town for big jets.
“Their only competitor, Airbus, has even longer backlogs,” said Aboulafia.” So if you were an airline customer for the 737 Max, the alternative would be to go to Airbus and wait until 2030 for your jet.”
Aboulafia thinks that means few airlines will drop Boeing over this latest 737 Max accident.
Boeing has been losing market share to Airbus in recent years, though. As of mid-December, Boeing had received about 1,000 orders for jets in 2023, compared to about 1,400 for Airbus, according to Reuters. But maintaining some amount of competition in the aircraft manufacturing sector is important to airlines, said George Dimitroff with Cirium Ascend Consultancy.
“If everybody starts running to Airbus, they’re very conscious that that eliminates the only serious competitor to Airbus, which is Boeing, and that could have longer term implications for aircraft pricing,” he said.
But in the nearer term, Dimitroff said that some airlines that planned to place an order with Boeing this year might wait to see how the aftermath of the Alaska Airlines accident plays out.
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