Boeing CEO on 737 crash: “We created the problem”

(CNN) — Boeing CEO Dave Calhoun said the company was responsible for a 737 Max 9 door cap blowing off during a flight earlier this month and said Boeing should have done better than it did in this case.

“We created a problem and we understand it,” he told investors during a call after reporting the company’s latest quarterly loss. “Whatever conclusion is reached, Boeing is responsible for what happened. Whatever the exact cause of the accident, this type of incident should not just happen on an airplane leaving one of our factories. We just have to be on top”.

Boeing did not provide the financial guidance it usually provides to investors, nor did it say when it would deliver the two new versions of the 737 Max it promised airlines, but which have yet to be certified by the Federal Aviation Administration (FAA). did not come .

“While we often use this time of year to share or update our financial and operational goals, now is not the time for that,” Calhoun said in comments to Boeing employees released by the company.

The January 5 incident in which a door plug broke on an Alaska Airlines flight has once again put the company on the defensive. Fortunately, no one was killed, as the crew was able to make an emergency landing within minutes of the hole opening, but panicked passengers on the short flight who tore their cell phones and laptops from the plane. This led to a three-week grounding of the Boeing 737 Max 9 model after an investigation uncovered problems with the installation of other door plugs.

“I’ve had hard, direct conversations with our customers, regulators and legislators,” he added. “They are disappointed and we have a lot to prove to earn the trust of our shareholders.”

Calhoun’s comments came after the manufacturer posted another loss for 2023, without providing a financial outlook for 2024, which will include expectations of Federal Aviation Administration approval for two new versions of the plane, the 737 Max 10, the longer-lived 737 Max 7. Short

Following the door plug incident, the FAA said it would not allow the company to proceed with a planned increase in production of existing models. And two major customers, United Airlines and Southwest Airlines, said last week that they were indefinitely delaying delivery plans for both models.

“Our people at the factory know better than anyone what we need to do to improve,” Calhoun said. “We’re going to go slow, we’re not going to rush the system and we’re going to take our time to get it right.”

“More scrutiny, whether from us, our regulators or others, will make us better,” he added.

In an interview Wednesday on CNBC, Calhoun said he did not expect what the National Transportation Safety Board, which is investigating what happened, would define as the cause of the incident. But he said he is “confident” that the (door) plug is “fully under control.”

He also defended the company’s decision not to issue new financial guidance.

“Our full focus, our full focus as a company is on making sure we never have a safety (incident) again, learning everything we can from the accident, learning everything we can from the FAA audit, the ideas that we Let’s learn everything we can. Our own people have given us,” he said.

When asked if Boeing has lost the trust of its airline customers, he said customers have so far told the company they will stick with Boeing.

“Was this something that hurt them? Absolutely. Like I said, these moments shake us all to the core: Boeing, our people, our customers, everyone,” he said. “Our job is to restore trust at all levels. They want Boeing to win. They want us to succeed.”

In what passes for good news for the embattled company, Boeing reported an adjusted loss of 47 cents per share, or about $285 million, in the fourth quarter, much better than a loss of $1.75 per share the year before. 78 cents per share was expected by analysts surveyed by Refinitiv.

Not only has the company reported a loss in every quarter since the end of 2019 except one, but it has almost always reported a larger-than-expected loss.

Boeing shares, which have lost about 20% of their value since the Alaska Airlines incident, rose slightly in premarket trading on Wednesday after Calhoun’s comments and the quarterly report.
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