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Boeing's terrible, horrible, no good, very bad year

Boeing sign
Boeing has faced a near-constant string of hurdles in 2024.

PATRICK T. FALLON/Getty Images

  • Boeing is having a rough year.
  • The company has faced mechanical problems, lawsuits, a leadership shake-up, and layoffs.
  • Here's a breakdown of how Boeing's year has gone from bad to worse.

Boeing has been going through it this year.

From losing a door plug on an Alaska Airlines flight, causing a side panel to blow out in midair, to an exodus of corporate executives, the company has faced a litany of crises in 2024. The company's stock has fallen about 35% this year.

In a message to employees during the company's third-quarter earnings call, Boeing CEO Kely Ortberg said the company was at a "crossroads."

"My mission here is pretty straightforward," she said. "Turn this big ship in the right direction and restore Boeing to the leadership position that we all know and want."

Here's how Boeing's year went from bad to worse.

Emergency on Alaska Airlines Flight 1282
The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland, Oregon
The fuselage plug section of Alaska Airlines Flight 1282.

NTSB via Reuters

The problems began almost immediately this year when, on January 5, Alaska Airlines Flight 1282 lost a door plug midair, blowing a hole in the side of the plane. While no one died in the incident, several passengers were injured, and the pilots were forced to make an emergency landing in Portland, Oregon.

In the aftermath of the incident, the FAA temporarily grounded over 170 of Boeing's 737 Max 9 planes until they could complete safety inspections.

The Justice Department opened an investigation into Boeing shortly after, and the FBI told passengers aboard the flight that they might have been victims of a crime.

Ongoing litigation
Boeing building set against the clouds.
Shareholders filed a lawsuit against Boeing following the Alaska Airlines incident.

Richard Baker/ Getty Images

Boeing was hit with multiple lawsuits this year.

Passengers from the Alaska Airlines flight filed a class action suit against the company just days after the incident.

"Passengers were shocked and confused, thrust into a waking nightmare unsure if these were their last seconds alive," the lawsuit said.

Boeing's shareholders filed a separate class action suit against the company in January, stating that it had prioritized profit over safety, Reuters reported.

Separately, in July, Boeing struck a plea deal related to two 737 Max crashes in 2018 and 2019 that killed 346 people. If a judge had approved the deal, it would have allowed Boeing to plead guilty to conspiracy to commit fraud, avoid a trial, pay a fine of about $244 million, and invest at least $455 million in safety and compliance measures.

Boeing agreed to pay $2.5 billion in 2021 in a deal with the federal government to avoid prosecution for the crashes, but Justice Department officials said in May that Boeing had violated portions of the deal, putting a trial back on the table. Relatives of the deceased passengers asked a Texas judge in October to throw out the agreement, which they called a "sweetheart" deal. The families have previously called for the company to pay a fine amounting to nearly $25 billion.

In December, the judge rejected the deal. A lawyer representing families who lost people in the 2019 crash told BI that they "anticipate a significant renegotiation of the plea deal that incorporates terms truly commensurate with the gravity of Boeing's crimes."

FAA audit of Boeing's safety procedures
A Boeing factory
A Boeing factory based in Washington, DC.

China News Service/Getty Images

The Federal Aviation Administration commissioned a report into Boeing following the fatal 2018 and 2019 crashes β€” and the results published in February weren't good news for the company.

The FAA report found 27 insufficient areas in Boeing's safety procedures, including no clear system for employees to report safety concerns, confusing management structures, and poor communication with employees about safety procedures.

The latest statement from the FAA about Boeing's compliance to remedy the safety issues was published in August. It said the agency continues "actively monitoring Boeing's progress in a variety of ways," including regular reviews by FAA experts of Boeing's safety procedures and issuing airworthiness certificates for every newly produced Boeing 737 Max.β€―

The FAA itself has faced scrutiny for its oversight of Boeing. A report from the Department of Transportation's Office of the Inspector General in October found the agency's checks were insufficient.

Exodus of Boeing executives
Dave Calhoun surrounded by reporters.
Former Boeing CEO Dave Calhoun.

Anna Moneymaker/Getty Images

In March, Boeing announced a leadership shake-up.

CEO Dan Calhoun said he would step down. Stan Deal, the CEO of the company's commercial airplanes division, said he would retire. In the same announcement, board chair Larry Kellner announced his plan not to seek reelection.

Stephanie Pope, the company's COO, was promoted to replace Deal shortly after his departure. At the end of July, Kelly Ortberg was named the company's new CEO.

Ted Colbert, who headed Boeing's defense, space, and security division, became the first prominent executive to leave the company after Ortberg took over. Colbert's departure was announced in September.

Stranded astronauts
smiling butch wilmore and suni williams floating laying in a white circular tunnel around a port in the space station
NASA astronauts Butch Wilmore and Suni Williams flew to space on Boeing's Starliner spacecraft.

NASA

The aerospace company faced another high-profile problem in June when NASA astronauts Butch Wilmore and Suni Williams traveled to the International Space Station on Boeing's CST-100 Starliner spaceship. It marked the first time Boeing flew astronauts to space.

The astronauts left Earth on June 5 and were supposed to return after eight days, but issues with Starliner's thrusters and helium leaks caused delays. NASA and Boeing began troubleshooting the problems to bring Wilmore and Williams back home. However, in late July, the two astronauts were still stuck at the International Space Station.

NASA's Commercial Crew Program manager, Steve Stich, said in a press briefing that month that Elon Musk's SpaceX could bring home the astronauts if needed. After working with Boeing to determine whether the two astronauts could safely return to Earth on Starliner, NASA announced in August that it chose SpaceX to do the job instead.

"Spaceflight is risky," NASA Administrator Bill Nelson said during a press conference. "Even at its safest. Even at its most routine. A test flight, by nature, is neither safe nor routine. So, the decision to keep Butch and Suni aboard the International Space Station, and bring the Boeing Starliner home un-crewed, is a result of a commitment to safety."

The decision was a major blow to Boeing, which spent $4.2 billion developing Starliner. Wilmore and Williams' flight was the final step Boeing needed to clear for NASA to certify Starliner for human spaceflight. It highlighted just how far Boeing lags behind its competitor, SpaceX.

Wilmore and Williams are now expected to return to Earth in 2025 on SpaceX's Crew Dragon spaceship, which launched for the International Space Station in September. The astronauts were initially set to return home in February, but NASA announced they would be delayed until March as SpaceX readies its spaceship.

Union strike
A worker holding up two signs that say "Machinists union on strike against Boeing."
Thousands of Boeing union members have been on strike since September 13.

Stephen Brashear/Getty Images

Thousands of unionized Boeing employees walked out in September after contract negotiations broke down.

The strike began despite a promising pay package proposal, which would have raised wages by more than 25% over the contract period for more than 32,000 employees in the Pacific Northwest.

Ultimately, union workers denied the proposal and voted to initiate a strike, which is costing the company about $50 million a day.

Negotiations stalled, with both sides filing National Labor Relations Board violations accusing the other of negotiating in bad faith.

Boeing and union leaders reached a tentative deal on October 19 that included a 35% general wage increase spread over four years and a one-time ratification bonus of $7,000.

However, striking Boeing employees rejected the deal on October 24.

"After 10 years of sacrifice, we still have ground to make up. We hope to resume negotiations promptly," the International Association of Machinists and Aerospace Workers said on X.

The 53-day strike ended in early November when workers approved a new contract.

Layoffs
Boeing employees install a cargo door on a 777 aircraft under production in June 2024.
Boeing cut 10% of its staff in October.

Jennifer Buchanan/POOL/AFP/Getty Images

Boeing began furloughs of white-collar workers in mid-September after the strike began. Select employees were required to take one week off every four weeks on a rolling basis.

Ortberg, in a staff memo, also announced that executive leadership would take a "commensurate pay reduction for the duration of the strike," though details of the pay reduction remain unclear.

Layoffs began several weeks later. In mid-October, Boeing announced plans to lay off about 10% of its 170,000-member workforce.

In a memo to employees, Ortberg said Boeing was in a "difficult position" and that "restoring our company requires tough decisions."

The company also delayed production of its 777X twin-engine jet and discontinued production of its 767 cargo plane, the memo noted.

Production delays with the Boeing 777X plane
A Boeing 777-X aircraft flies during the 2023 Dubai Airshow at Dubai World Central - Al-Maktoum International Airport in Dubai on November 13, 2023.
A Boeing 777X in flight.

GIUSEPPE CACACE/AFP via Getty Images

The experimental 777X is Boeing's newest widebody plane, banking 481 orders from more than a dozen global carriers even though regulators have not yet approved it to fly passengers.

But the aircraft has been riddled with production problems β€” like supply chain issues, design troubles, and now the ongoing strike β€” which have already put it five years behind schedule and set Boeing back $1.5 billion.

That hole will likely deepen with the latest entry delay to 2026, further eroding the industry's trust in Boeing's 777X program. It could also push carriers to choose Boeing's European rival Airbus and its already-in-service Airbus A350.

The aircraft is still uncertified but started certification flight testing in July. Testing was halted in August due to a problem with a key part that connects the engine to the aircraft, CNBC reported.

Production troubles with Boeing's 737 MAX aircraft
A Boeing 737 tail fin and a Boeing 737 Max winglet.
Boeing is struggling with 737 MAX production.

JULIEN DE ROSA/Getty Images

The FAA announced in January that it would not grant any production expansions of Boeing's MAX aircraft, including the 737 MAX 9, following the emergency on Alaska Airlines Flight 1282.

"The Jan. 5 Boeing 737-9 MAX incident must never happen again," the FAA said in a press release said.

FAA Administrator Mike Whitaker said Boeing would not be cleared to expand production or add additional production lines for the 737 MAX "until we are satisfied that the quality control issues uncovered during this process are resolved," according to the press release.

Boeing held a three-hour meeting with the FAA in June to address safety and quality concerns. Afterward, Whitaker spoke at a press conference, where he told a reporter that expanding production of 737 MAX planes was still up in the air.

The FAA told Business Insider, "This is about systemic change, and there's a lot of work to be done. Boeing must meet milestones, and the timing of our decisions will be driven by their ability to do so."

The agency added: "Boeing has delivered a roadmap to change its safety culture, and the FAA will make sure Boeing implements the changes they have outlined. We will not approve production increases beyond the current cap until we're satisfied they've followed through on implementing corrective actions and transforming their safety culture."

Boeing restarted production of the 737 Max in December following the strike's conclusion.

Whistleblowers report problems at Boeing
Boeing Employees Renton Washington
Whistleblowers have called out Boeing in 2024.

Stephen Brashear/Getty Images

Sam Salehpour, a Boeing engineer, testified at an April Senate hearing that the company ignored his reports on safety concerns, that his boss retaliated against him, and that he received threats against his physical safety.

The Senate subcommittee investigating Boeing's safety and quality practices released a 204-page report in June. The report included accounts from several whistleblowers.

Sam Mohawk, a Boeing quality assurance inspector, said the company lost track of hundreds of bad 737 parts and instructed employees to conceal improperly stored plane parts from FAA inspectors.

Another whistleblower, Richard Cuevas, wrote in a June complaint to the FAA that holes were being incorrectly drilled on Boeing's 787 Dreamliner planes.

Money woes
Asia-aerospace-Singapore-aviation,ADVANCER by Martin Abbugao A Boeing 787 dreamliner is seen on the tarmac at the Singapore Airshow in Singapore on February 12, 2012
A Boeing 787 Dreamliner.

ROSLAN RAHMAN/AFP via Getty Images

In a sign of how Boeing's problems have hurt its bottom line, the company said in a regulatory filing to the SEC in October that it had entered a $10 billion credit agreement with four major banks: JPMorgan Chase, Goldman Sachs, Bank of America, and Citibank.

The company also filed a prospectus saying it might sell up to $25 billion in securities.

"These are two prudent steps to support the company's access to liquidity," Boeing said in a statement.

While workers were on strike, Bank of America analysts estimated that the work stoppage cost Boeing $50 million a day.

To save money, Ortberg, the company's CEO, instructed top executives to stop flying private jets and instead fly economy on commercial flights.

Read the original article on Business Insider

I've flown on the Airbus jet Alaska will fly to Tokyo. It was a comfortable ride and I'm excited about the airline's new long-haul flights.

10 December 2024 at 14:21
Alaska Hawaiian
Alaska is banking on Hawaiian's widebody planes to expand into Asia.

Tayfun Coskun/Anadolu Agency via Getty Images

  • Alaska Airlines' merger with Hawaiian Airlines gives it access to long-haul Airbus and Boeing planes.
  • The airline is pressuring mainline competition in Seattle with new nonstops to Asia in 2025.
  • Japan's tourism boom makes it a strategic destination and I'm excited about the expansion.

Fresh off a $1.9 merger with Hawaiian Airlines, Alaska Airlines has big plans for using its new widebody planes with new routes to Asia.

The airline announced Tuesday plans to fly former Hawaiian Airbus A330 planes to Tokyo and Seoul from Seattle in 2025, utilizing operations infrastructure already in place under the newly acquired airline.

Seattle is a huge hub for Alaska, where it holds 55% of the domestic market β€” but its prior lack of overseas reach makes the Asia expansion a no-brainer.

Alaska chief commercial officer Andrew Harrison told The Points Guy that demand is stronger from Seattle than from Honolulu, where Hawaiian previously served Tokyo. Alaska can also take advantage of strong cargo and corporate demand from Seattle.

Leaving Seattle will also mean shorter flight times than from cities like San Francisco and Los Angeles, where United Airlines and American Airlines operate.

The blue pair of seats on Hawaiian.
The author's economy seats on Hawaiian Airlines' A330 in November 2023.

Taylor Rains/Business Insider

The expansion will also put pressure on competing Delta Air Lines, which already flies nonstop from Seattle to both cities.

Delta has been investing in its Seattle hub for years as it tries to take advantage of the city's West Coast location and poach business.

But Alaska's new routes, which Harrison said will grow to 12 by 2030, are likely to maintain and grow Seattle locals' loyalty to Alaska β€” and those across the country who need more one-stop options to Asia.

Alaska's incoming A330s are nice but lack premium economy

I'm thrilled about Alaska's international expansion.

Seattle may be far from my local New York airports, but flyers now have more choice across the Pacific β€” and likely beyond, depending on where Alaska's next 10 routes will lead.

Alaska said the merger wouldn't lead to immediate changes on board Hawaiian's aircraft, meaning the A330 I flew on in economy to Honolulu in November 2023 will offer a similar experience to those flying to Japan in 2025.

Seat 42H viewed from the window seat.
The screens do not flip up when the seat is reclined, impacting the viewing angle.

Taylor Rains/Business Insider

In my experience, the coach seats were well-padded, offered enough legroom for my five-foot-three-inch self, and had an adjustable headrest β€” a must for me to sleep in economy.

I also appreciated the rows were fit with only two seats on the sides closest to the windows. There were four in the middle sections.

My only gripe was the deep recline. While I loved the comfort it offered, it meant every passenger had to recline, or the person in front would cut into your space if you were sitting upright.

If you're inclined to rest or sleep, it's great. But if you want to sit more upright to watch a movie, expect to feel a little cramped and have a slightly annoying viewing angle to the screen.

A top-down view of the author's legroom with her REI backpack under the seat in front.
The legroom on Hawaiian's A330 was enough for my husband and I. The seatback pockets don't have extra slots for better organization, though.

Taylor Rains/Business Insider

The planes do not offer premium economy, but Harrison said the aircraft would be retrofitted to add the popular cabin in the coming years.

Delta may earn business in the meantime thanks to having premium economy already installed on its A330-900neos flying from Seattle to Tokyo.

Alaska's Asia-bound planes could also change once Alaska gets more of Hawaiian's undelivered Boeing 787 aircraft.

Business class on these planes represents a significant upgrade to that of the A330s, which don't offer the same privacy or direct-aisle access.

Travel to Japan is breaking records

Japan makes sense as Alaska's first long-haul destination. The nation's fall foliage, cherry blossom season, shopping, and myriad cultural and historical sites make it a tourist hot spot.

A September report from Mastercard Economics Institute showed a 153% increase in visitors from the US to Japan in the first half of 2024 compared to the same time in 2019. Travelers from Canada increased by 148%.

CNBC reported that Japan expects 35 million total travelers by the end of 2024, representing a 10% increase from 2019.

Crowds are so high that Japan Airlines is pushing travelers to use a bag delivery service to send luggage straight from the airport to their hotel or accommodation instead of carrying them on the train.

Cherry blossoms in bloom in Tokyo, Japan, in March 2023.
Japan is expected to see a spike in tourism during Spring Break, part of which coincides with the cherry blossom season.

Taylor Rains/Business Insider

The boost is, in part, thanks to cheaper airfare β€” and Alaska's new route is likely to further lower prices out of Seattle.

Flights from the US to smaller Japanese cities have seen huge drops. Kayak data shows Sapporo fares are down 19%, Okinawa fares are down 17%, and Osaka fares are down 14% compared to 2023.

Japan Airlines' new free flight program may have helped, which comps domestic legs for many tourists who also book a roundtrip international flight to Japan on the same booking.

Read the original article on Business Insider

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