Airline Groundings and Safety Concerns Create Turbulent Situation
Boeing’s recent troubles with the 737 Max 9 aircraft have potential implications for the entire US economy, warns Mike Boyd, president of Boyd International. The aviation expert highlights a recent incident on an Alaska Airlines flight where the door of a 737 Max 9 plane blew out. While no fatalities were reported, the incident led to chaos in airline stocks and prompted the grounding of all 737 Max 9 planes.
Although inspected Max 9 jets have since been given the green light to resume flying, concerns about the safety of Boeing’s planes persist. This has the potential to cause significant problems for airlines that are already grappling with delays in the delivery of 737 aircraft that were on order. “That’s going to be a big hit for them because they don’t have anything to replace those,” Boyd explains. “We’re going to be looking at a very bumpy year because these airlines, a number of them, aren’t going to have enough airplanes to put into the sky.”
The flight disruptions resulting from the grounding of the 737 Max 9 planes are not only expected to impact travel to major cities like Chicago and Seattle, but also affect companies and suppliers relying on air transportation for shipping materials. In a note published on January 8, Boyd points out that the fallout from the Alaska incident could have widespread effects across the nation, affecting not just Alaska and United, but dozens of communities.
United Airlines Considering Alternatives as Customer Frustration Grows
According to Boyd, some of Boeing’s largest customers, including United Airlines, are likely to explore options with other aircraft manufacturers. United CEO Scott Kirby has already expressed his dissatisfaction with the recent door incident and subsequent grounding of Max 9 planes, stating that it was the “straw that broke the camel’s back.” Kirby reveals that the airline is making plans for a future without the Max 10, which is significantly delayed in its delivery schedule.
The repercussions of Boeing’s troubles are evident in its stock performance, which has declined by 20% year-to-date. Boyd criticized Boeing’s handling of the situation and CEO Dave Calhoun’s responses, stating, “What Boeing has done, which I think is totally incompetent with this, is going to hurt the entire economy.”
Boeing, through its Commercial Airlines CEO Stan Deal, has expressed deep apologies for the significant disruption caused to its airline customers, their employees, and passengers. Deal emphasizes that the company has devised a comprehensive plan to resume safe operations.
The Federal Aviation Administration grounded over a hundred 737 Max 9 planes following the recent incident, leading to numerous flight cancellations. An investigation revealed loose bolts on many 737 Max planes, adding to the growing concerns. In 2019, two Boeing 737 Max planes were involved in fatal crashes, resulting in the loss of nearly 350 lives.