737 max, fatal accidents and loss of reputation

(CNN) — Boeing had a reputation for unmatched safety and quality in its commercial aircraft. Not so now.

The horrific crash aboard the 737 Max 9 aircraft — just 10 weeks old — on Friday night, Jan. 5, raises a long line of safety and quality control questions about those planes. Boeing. Amazingly, no one was killed or seriously injured when a piece of the plane tore off the side of the fuselage minutes into the flight from Portland, Oregon to Ontario, California, and some of the plane’s contents were voided.

“It’s fortunate that no one died and there were no more serious injuries,” National Transportation Safety Board (NTSB) Chair Jennifer Homendi told CNN.

Investigators continue to review data and eyewitness accounts and examine the plane itself. The NTSB’s first details are heartbreaking: Homandy said a headrest was missing from seat 26A, which is next to a refrigerator-sized hole on the left side of the plane, as well as seat 25A across from it. The seat frames are bent, the oxygen masks are dangling and a piece of clothing is caught in a hole by a plug missing from the part that separated from the plane, Homendi said.

“The video looks very calm, but I’m sure it was completely chaotic and very loud,” Homandi said, referring to the video taken by the passengers.

The cause of the accident has not been determined. While the plane’s automatic pressurization fault light came on three times in the past month, Homandy noted that it was unclear if there was any connection between the warning light and Friday’s incident.

But the plane was put into service in October. The fact that the plane is essentially new suggests it may ultimately be Boeing’s fault and not Alaska Airlines’ maintenance team, said Richard Aboulafia, managing director of Aerodynamic Advisory, an aerospace and defense management consultancy headquartered in Michigan.

The only good news for Boeing is that “this is almost certainly not a design issue,” Aboulafia said. But that doesn’t absolve the planemaker, he said.

“It almost certainly leaves us with a manufacturing process,” he said.

Boeing said it agrees with the Federal Aviation Administration’s (FAA) decision to ground all 737 Max 9 planes while they are inspected.

The FAA, Boeing’s top regulator, is facing intense scrutiny over a recent series of airline delays and near misses on planes, as well as criticism for giving planemakers too much freedom to regulate during the certification process.

But the company, for five years, has been facing frequent quality and safety issues with its planes, leading to prolonged grounding of some planes and stalling of deliveries of others. Shares of Boeing ( BA ) fell nearly 9% in premarket trading Monday as investors grew increasingly concerned about further damage to its business.

The most obvious quality problems for Boeing arose with the design of the 737 Max, which was found to be responsible for two fatal crashes: one in Indonesia in October 2018 and another in Ethiopia in March 2019. Together, the two crashes killed all 346 people on board. Two flights and the company’s best-selling plane were grounded for 20 months, costing more than $21 billion.

But the design flaws caused by the accidents raised questions about the decision-making process at Boeing. An internal communication released during the grounding of the 737 Max was described by one employee as the plane was “designed by clowns, who in turn are overseen by monkeys”.

Two other employees agreed that they would not allow their family members to fly on the plane. The documents Boeing released include apologies to the FAA, the US Congress, airlines and their passengers.

The company said it will hold an all-employee meeting “focused on safety” on Tuesday at the 737 Max factory in Renton, Washington.

Quality issues extend beyond the 737 Max

The problems with Max are part of the quality control problems that have plagued the company.

Quality concerns cited by the FAA forced it to halt deliveries of its 787 Dreamliner twice for about a year, starting in 2021 and again in 2023. And a 777 plane also suffered engine failure on a United flight, scattering engine debris over houses and the ground.

Some of those problems, such as problems with 777 engines, were attributed to Boeing suppliers. But Boeing has worked in recent years to reduce the costs it pays to its suppliers, such as those who make its airframes and engines. Richard Aboulafia of Aerodynamic Advisory suggested that the decision may have contributed to a series of quality control problems with its planes.

The company did not respond to a request for comment on whether the Alaska Airlines flight was related to Boeing’s recent quality problems.

The problems with Alaska Airlines’ 737 Max flight are not the first since the plane returned to service three years ago after its grounding. Last December, Boeing asked airlines to inspect all of its 737 Max planes for possible loose bolts in the rudder system, after one airline found a possible problem with a key part on two planes.

Every time a new problem arises, Boeing insists that safety and quality are the company’s number one priority.

“Safety is our highest priority and we deeply regret the impact this incident has had on our customers and their passengers,” Boeing said after the Alaska Airlines crash.

A lost reputation for safety and quality

It wasn’t long ago that Boeing had an unrivaled reputation for quality and safety. “If it’s not Boeing, I’m not going” (“If it’s not Boeing, I’m not going”), used as an expression to convey the confidence that passengers and airline crews place in the aircraft manufacturer’s quality.

Boeing still sells T-shirts and coffee mugs with that expression, which no longer resonates with many passengers.

It’s not easy to tell when things started to change at Boeing. Some aviation industry experts point to a 1997 merger with McDonnell Douglas that finally gave the company top executives who were not former engineers like previous Boeing leaders.

Others point to the decision to move corporate headquarters away from its Pacific Northwest roots, first to Chicago in 2001 and then in 2022 to Arlington, Virginia, near the Pentagon and across the Potomac from Washington, DC.

And Boeing’s quality control problems aren’t limited to its commercial aircraft unit. Many of its military aircraft have also had quality issues that have forced the company to take huge charges against its profits. The highest profile of those problems involves the reconfiguration of two new 747s as the next presidential plane, Air Force One. Boeing has declared a loss of more than $2 billion on those two planes alone.

Its space efforts lag far behind Elon Musk’s upstart SpaceX, as its Starliner spacecraft, designed to deliver and transport astronauts to the International Space Station, has yet to have a crewed flight due to a series of errors, delays and setbacks. Its first crewed flight is scheduled for later this year, but it will come four years after SpaceX flew astronauts to the space station.

Boeing’s quality problems affect the bottom line

As recently as 2019, the company was reporting strong sales and profits, surpassing $100 billion in revenue for the first and perhaps only time in its history. But it has since fallen far behind rival Airbus, particularly in the key market for single-aisle aircraft like the 737 Max.

Some issues are beyond its control, such as trade tensions between China and the United States that are eroding demand for its planes in the crucial Chinese market. But many of these quality problems have angered the airline’s customers, who have been frustrated by delays and suspensions affecting their own expansion plans.

In 2022, Michael O’Leary, the CEO of Ryanair, Europe’s largest discount airline and a major Boeing customer, publicly lashed out at Boeing management, saying they needed to “get their act together” and that company executives should immediately “reboot” or Kick in the a**.

The company has reported only one profitable quarter since 2019 due to delivery and production issues, and it is unclear when it will report an annual profit again.

The fact that Boeing and Airbus are the only two major global aviation companies means that Boeing probably doesn’t have to worry about being put out of business, no matter how widespread its mistakes. Neither company has been able to meet all the demand for commercial aircraft, and both have backlogs of orders dating back years.

But the problems have kept Boeing far behind Airbus.

Boeing had to postpone plans for its next-generation aircraft, known as the Boeing 797, which was supposed to offer airlines a mid-size, long-haul aircraft to compete with the Airbus A321XLR. And it has delayed plans to start production of the next version of the 777, the 777X, which was originally due to start delivering to customers late last year. Now Boeing won’t deliver the first 777X until at least 2025.

— CNN’s Pete Munten, Gregory Wallace and Jackie Wattles contributed to this report.