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The grounding of the 737 Max signaled only the first of an unknown number of painful rounds of industrial penance that Boeing is being required to pay by its regulator.
In the past two and a half years, Boeing has accumulated more than $30 billion in write-offs, charges and abnormal costs stemming from the 737 Max, 777X and 787, the core of its future commercial aircraft programs. While each is seen by management as a discrete technical problem it must solve, some in its engineering corps tell The Air Current that they see a continuum across each of a regulator now asserting its authority at every turn.
Related: Boeing grapples with a ‘Pandora’s box’ on 787
The first castigation came as the result of how Boeing originally designed and certified the 737 Max and its flight control system — the principal instigator in the jet’s two fatal crashes in 2018 and 2019. The airplane spent 20 months on the ground, cleared to return in the U.S. in November 2020 after exacting both a reputational toll and financial cost of some $20 billion.
The Federal Aviation Administration today, on February 7, released draft guidance aimed at protecting company staff delegated by the aviation regulator from undue pressure. The changes are the result of new legislation passed by Congress in December 2020 aimed at overhauling the aircraft certification process in the wake of the twin crashes.
The second regulatory gantlet continues to unfold. For a brief period in 2021, all of Boeing’s airplanes were being delivered, but by May 787 deliveries were halted — a move which Boeing was volun-told to do by the FAA. That tipped the program into a loss position for the first time, forcing a $3.5 billion charge to its earnings created by customer penalties for late 787s.
The charge, announced January 26, came 16 months after TAC first reported Boeing had yanked eight 787s from active service, triggering a cascading series of findings across the aircraft that has now left 110 near-completed 787s awaiting inspection, rework and eventual delivery. It’s an inventory of aircraft valued at roughly $15 billion to $20 billion. When those deliveries will resume is an unanswered question, with one influential customer signaling that handovers before July are looking unlikely.
Related: Boeing yanks eight 787s from service over structural issue
Boeing’s third chapter – the completion of the 777X – remains a long way off. And the company’s goal of delivering the 777X in 2023 is in jeopardy with a key milestone pushed to no earlier than the end of the year, according to program engineers. Boeing continues to work through design issues on the jet and awaits the FAA’s blessing to begin its own certification trials. Boeing in January 2021 took a $6.5 billion charge on the 777X’s development and resulting delays.Continue Reading...