U.S. airlines, fed up, forced change in the Boeing C-suite

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In the end it was the CEOs of United Airlines, Southwest Airlines, American Airlines and Alaska Airlines who ultimately catalyzed a change in leadership at the top of Boeing.

The board of directors convened on a conference call over the weekend after a story in the Wall Street Journal reported that the chief executives of Boeing’s biggest U.S. customers were seeking meetings with Boeing’s board with CEO David Calhoun absent. That plan was designed to seek reassurance of Boeing’s trajectory “to get back on track” by United’s Scott Kirby, Southwest’s Bob Jordan, American’s Robert Isom and Alaska’s Ben Minicucci with “no filter” of their views through Boeing’s CEO, according to interviews by The Air Current with multiple senior industry leaders and officials.

“They didn’t want to get the defensive bulls***. They wanted the board to hear it directly through them” and not filtered through Calhoun and Boeing Commercial Airplanes CEO Stan Deal, said one knowledgeable senior industry leader. This plan was solidified at an Airlines for America board meeting on March 7, according to three industry officials familiar with the meeting and the resulting plan. In seeking the meetings, which have not yet occurred and are planned for the coming weeks, they became a symbolic vote of no confidence in Boeing’s leadership.

Related: New Boeing CEO tasked with fixing rifts he and the board helped cultivate

Deal was notified Sunday of his firing — publicly couched as a decision to retire after 38 years with the company. Deal departs along with the board chair, Larry Kellner, former CEO of Continental Airlines, who won’t seek reelection at the May shareholders meeting, and Calhoun (already two years past the historical Boeing mandatory retirement age of 65), announced his plans for year-end retirement after just over four years as CEO and 15 years on the board while the company begins the search for a successor.

Just a few months ago Boeing seemed impervious to strategic change. “There is a strata at the top that’s in denial,” a top executive at a U.S. airline that flies hundreds of Boeing airplanes told TAC earlier this year. “I can’t tell them the emperor has no clothes.” 

It is Boeing’s customers who, second only to the Federal Aviation Administration, have been pushing the hardest for strategic change at the aerospace giant. They have urged the company to retake the reins at Spirit AeroSystems, bringing that critical supplier back into the fold to rethink how it achieves stability in its overall industrial operation.

Their frustration runs deep. Even with a full-throated public embrace of responsibility for the Alaska Airlines 1282 accident, years of Boeing over-promising and under-delivering on timelines, plans and initiatives that never materialized only deepened the mistrust. Senior airline leaders lamented unrealistic schedules for airplane development, production and delivery repeatedly put in front of them with the knowledge they can neither be achieved nor disproven as inaccurate today.

Now, Boeing is deep in advanced negotiations to reacquire Spirit and the plane maker has a new chairman, former Qualcomm CEO Steve Mollenkopf in addition to a new head of its commercial business, Stephanie Pope, who has been COO for the last three months (and continues in that role) after serving as the head of Boeing Global Services. Yet, the consensus among top U.S. airline and aerospace executives is that removal of its top three leaders is only the first part of what Boeing’s ecosystem hopes will be a systemic recognition of how it arrived at this moment and what needs to change in how it does business.

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