Boeing Max 9 accident sends its reputation into a tailspin

{"text":[[{"start":12.36,"text":"So much for Boeing’s comeback year. "},{"start":14.827,"text":"Five days into the new year Dave Calhoun, head of the US aerospace group, finds himself returning to crisis management. "}],[{"start":22.66,"text":"On Friday, an unused emergency exit door — known as a door plug — flew off a Boeing 737 Max 9 plane operated by Alaska Airlines in mid-flight. "},{"start":32.727000000000004,"text":"US regulators immediately ordered 171 of the 217 Max 9 fleet grounded. "},{"start":38.519000000000005,"text":"Boeing shares dropped 7 per cent on Monday. "}],[{"start":42.25,"text":"Under Calhoun, Boeing has tried to return a stalled 737 Max programme following a pair of fatal crashes five years ago. "},{"start":50.016999999999996,"text":"The Max resumed flight in late 2020 but the crisis blackened the company’s reputation and cost it tens of billions of dollars in damages, government fines and lost orders. "},{"start":58.972,"text":"Rival Airbus has since extended its lead in the lucrative market for single-aisle aircraft. "}],[{"start":64.13,"text":"Boeing’s share price remains down 50 per cent from its pre-crisis peak. "},{"start":68.609,"text":"Saddled with about $47bn in long term debt, it has not made a profit since 2018. "}],[{"start":75.03,"text":"This terrifying incident could cause much less damage to Boeing. "},{"start":78.797,"text":"Experts believe the blowout was the result of a manufacturing not a design error. "},{"start":83.227,"text":"A hopeful Boeing will point to this accident as a one-off, rather than a fleet-wide issue. "}],[{"start":null,"text":""}],[{"start":88.36,"text":"The 737 Max is Boeing’s top-selling product. "},{"start":92.30199999999999,"text":"The family of jetliners accounts for about three-quarters of its commercial orders. "},{"start":96.519,"text":"Analysts at Melius reckon the fleet could bring in nearly $27bn in sales in 2024, about 28 per cent of forecast Boeing group sales. "}],[{"start":106.22,"text":"Within this, the Max 9 — the only variant that allows for a plugged door — accounts for a small portion of 737 revenue. "},{"start":114.262,"text":"Of the 4,526 outstanding orders for 737 planes, only 103 — or 2 per cent — are for the Max 9. "}],[{"start":123.56,"text":"Boeing will still have to compensate airlines for the grounding of the Max 9. "},{"start":127.81400000000001,"text":"United Airlines and Alaska operate the most, with about 144 planes between them. "},{"start":133.05700000000002,"text":"Using FAA guidelines of four to eight hours of inspection per jet and assuming all can be completed within a week, the compensation would cost Boeing about $18mn, according to Jefferies. "},{"start":143.349,"text":"This even the lossmaking Boeing should manage. "},{"start":145.892,"text":"It had expected to earn $3bn-$5bn in free cash flow in 2023. "}],[{"start":151.93,"text":"Longer term, the incident must renew scrutiny over Boeing’s safety and quality control records. "},{"start":157.434,"text":"Deliveries of another Boeing plane, the twin-aisle 787 Dreamliner, stalled after production flaws were found. "}],[{"start":165.23000000000002,"text":"Then there is China, a large buyer of 737 Max aircraft. "},{"start":169.997,"text":"While Beijing has allowed Max aircraft delivered before the recent grounding to fly again inside China, new deliveries (and the associated cash flows) have remained on hold. "},{"start":179.35200000000003,"text":"Boeing down time could last a while longer yet. "}],[{"start":null,"text":""}],[{"start":182.02,"text":""}]],"url":"https://creatives.ftacademy.cn/album/137185-1704770233.mp3"}