After two fatal crashes involving its best-selling 737 Max 8 planes five years ago, Boeing spent billions of dollars to make its products safer and repair its reputation. Now, the company is again facing a wave of uncertainty and costs after a painful incident involving a different 737 jet.
Just four weeks ago, a hole opened up in a 737 Max 9 during an Alaska Airlines flight shortly after takeoff when what appears to have been a poorly connected panel tore. The Alaskan pilots made an emergency landing as terrified passengers feared the worst.
The incident prompted the Federal Aviation Administration to indefinitely halt Boeing’s ambitious plans to ramp up production of Max planes. Passengers have filed class action lawsuits against the company. And some angry airline executives are taking the rare step of publicly criticizing Boeing and expressing doubts about its ability to deliver planes when expected. The CEO of United Airlines has gone so far as to suggest that his company may cancel some of its orders with Boeing.
A case the company settled with the federal government for $2.5 billion in the final days of the Trump administration to avoid prosecution could be reopened if the Justice Department finds that Boeing did not comply with the terms of the settlement.
Boeing referred questions about that deal to the Justice Department, which declined to comment.
Compounding the problems for Boeing, a supplier has found a new problem with the fuselages on dozens of unfinished 737 Max planes, the company said on Sunday. In a memo to employees, Stan Deal, the chief executive of Boeing’s commercial airplane unit, said the supplier last week identified that “two holes may not have been drilled exactly to our requirements.”
He did not name the supplier. But a spokesman for Spirit AeroSystems, which is based in Wichita, Kan., and makes fuselages for the Max, said a member of its team spotted a problem last week that didn’t meet engineering standards.
Mr. Deal said the problem was “not an immediate flight safety issue” but would force the company to rework about 50 planes, delaying their delivery.
Such delays, even if they prove to be short, could add up over time and result in lower profits or larger losses for Boeing. The company lost $2.2 billion last year after losing $5 billion in 2022.
There is so much uncertainty surrounding Boeing that its executives last week declined to provide a financial forecast for this year.
“Now is not the time for that,” Boeing Chief Executive Dave Calhoun told Wall Street analysts on Wednesday. “We will not predict the timetable. We will not catch up with our adjuster. We’re going slow for fast.”
Since the Alaska Airlines incident, which occurred on Jan. 5, Boeing shares had fallen about 16 percent late last week. They were down about 2 percent on Monday morning after news of delayed deliveries of 50 Max jets.
Stewart Glickman, an analyst at CFRA Research, said Boeing could lose more market share to its main competitor, Airbus, and even to much smaller manufacturers such as Embraer, if the company’s manufacturing processes “don’t burn out.”
When the panel, known as a door plug, blew off the Alaska Airlines plane, Boeing had not yet fully recovered from its latest crisis: the Max 8 crash that killed nearly 350 people in Indonesia in October 2018 and Ethiopia in March of 2019.
In a financial filing Wednesday, the company said it paid $400 million to 737 Max customers in 2023, after paying $1 billion in 2022. In total, those two crashes and the nearly two-year grounding of the Max 8 cost Boeing about 20 billion dollars.
Ronald Epstein, senior aerospace and defense analyst at Bank of America Global Research, estimated that the Alaska incident and its ripple effects — such as penalties and costs related to oversight — could ultimately cost the program $1 billion Boeing’s 737 Max.
Mr. Epstein highlighted several factors that contributed to the murky outlook for Boeing, including uncertainty about the company’s production system, as well as how increased scrutiny on the Max could affect another Boeing model, the 777X, which has already late. FAA certification. He added that it was unclear when the FAA would certify Boeing’s Max 7 and Max 10, which are critical pieces of the company’s production plans.
“We don’t know what the slope of the ramp is going to be,” he said. “We don’t know what the production slope will be. We just don’t know.”
Before the Max 8 crash, Boeing was producing about 52 planes a month. The pandemic ground production to a halt, but the company had slowly regained momentum. By the end of last year, the company said it was producing 38 Max planes a month. had said it planned to increase its production to 42 planes a month this year and to about 50 in 2025. But the FAA directive halted those plans, possibly for several months.
Further complicating Boeing’s path to recovery is a smaller and less experienced workforce than it had before the pandemic. As often happens when the economy slows, the company laid off, furloughed and bought out many experienced workers. When production resumed, Boeing had to hire or rehire workers.
But this time, like other companies, Boeing has failed to bring back many of the experienced workers who left during the pandemic, according to Jason Gursky, a Citi analyst who follows Boeing. Solving the labor issue, Mr. Gursky said, will be instrumental in boosting production.
Another potential problem for the company is that travelers could be more afraid to fly its planes.
Unlike the Max crashes, which were caused by a defect in the aircraft’s flight stabilization system, the January 5 incident appears to be the result of a manufacturing error. Workers at the Boeing plant in Renton, Washington, appear to have opened and reinstalled the door plug that later exploded at 16,000 feet. The National Transportation Safety Board is set to release a preliminary report on the incident in the coming days.
The distinction between design and manufacturing defects may not matter to passengers. In a January poll by YouGov and The Economist, 29 percent of Americans rated the Boeing 737 Max 9’s safety record favorably, while 32 percent rated it negatively. 40 percent said they didn’t know.
Mr. Gursky, the Citi analyst, said the key to Boeing’s recovery from its latest setback was simple: getting back to “core operations” following the guidance given by regulators, along with hiring more workers and avoiding bad publicity. Besides, he said, most passengers are not attuned to the brand of plane they are flying.
“People don’t know if they’re getting on a Boeing or Airbus aircraft when they get on it,” Mr. Gursky said. “You don’t know until you take the security card out of the pocket of the seat in front of you.”
Richard Aboulafia, managing director at AeroDynamic Advisory, an aerospace consulting firm, said he is not worried about Boeing’s financial strength, but he is concerned that the company has not done enough to fix its challenges.
“There is only one uncertainty, which is whether or not they will change to avoid irrelevance and possibly worse,” he said.
