Watershed Year: Boeing’s Challenging 2024

DALLAS — That 2024 has been a tough year for Boeing is an understatement. Different incidents, leadership changes, aircraft orders rejigs, and production mistakes occupied the front pages of newspapers and home pages of news websites.

As the year ends and a new one begins for the American manufacturer, we take a step-by-step look into Boeing’s defining moments of the last 12 months.

The Door Plug Blowout

The year started downhill for Boeing. On January 5, an Alaska Airlines (AS) Boeing 737-9 experienced a mid-flight blowout of a rear door plug. 

The incident on flight 1282 occurred on a flight from Portland to Ontario at 16,000 feet, causing an uncontrolled aircraft decompression. Thankfully, no fatalities were registered, and the aircraft landed safely. However, the event was added to the Boeing 737 MAX record of mistakes.

The door plug blowout prompted immediate safety reviews, which uncovered missing maintenance paperwork and saw Boeing divulge secure information, among other things.

Consequently, the Federal Aviation Administration (FAA) grounded all Boeing 737-9 jets for three weeks.

The National Transportation Safety Board (NTSB) released a preliminary investigation on February 6, which stated that the damage patterns on the door plug indicated that the four bolts intended to secure the door plug had been missing when the accident occurred. 

They also reviewed Boeing records that showed evidence that the plug had been installed with no bolts.

Boardroom Shuffle, Airbus Deal

In March, Boeing announced major board and management changes. On March 25, news broke that Dave Calhoun stepped down as CEO. He would be replaced by Kelly Ortberg, who was appointed at the end of July. 

In Boeing Commercial Aviation, or BCA, Stephanie Pope immediately replaced Stan Deal as Chief executive officer. Before this role, Pope served as chief operating officer for the company since January 2024.

On July 1, Boeing announced the acquisition of Spirit AeroSystems for a total transaction value of approximately $8.3 billion, including Spirit's last reported net debt. At the time, Boeing President and CEO Dave Calhoun commented, “We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders, and the country more broadly.” 

Calhoun added, “By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives, and outcomes – centered on safety and quality.”

On the same day, Airbus entered into a binding term sheet agreement with Spirit AeroSystems concerning a potential acquisition of significant activities related to Airbus, notably the production of A350 fuselage sections in Kinston, North Carolina, U.S., and St. Nazaire, France; of the A220’s wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; as well as of the A220 pylons in Wichita, Kansas, U.S. 

The transaction would cover the acquisition of these activities. Airbus was compensated by US$559 million from Spirit AeroSystems for a nominal consideration of US$1.00, subject to adjustments based on the final transaction perimeter.

The Airshows

A few days later, before the event of the year, the 2024 Farnborough Airshow, the manufacturer carried out its first certification test flight on July 12, welcoming inspectors from the FAA.

However, the manufacturer did not showcase any of its lineup at Farnborough. Airshows are usually celebrations of airlines and manufacturers. The participants are expected to showcase their best and most innovative products. 

Boeing opted not to bring its next-generation lineup to FIA2024, citing ongoing certification work and efforts to focus its resources on development programs.

After many international events, including the Paris Airshow, the 2022 Farnborough Airshow, the Dubai Airshow, and more, the manufacturer did not fly any demonstrators to the British countryside. In its chalet, Boeing still has its 777X cabin demonstrator and technology showcasing the latest product developments.

Unfortunately, a new setback soon hit the manufacturer. On August 19, Boeing grounded its triple seven X test fleet after a key engine mounting structure failed. The issue did not directly concern the General Electric 9X that powers the aircraft but rather a Boeing component.

While the grounding only lasted a few weeks, it reminded us of the importance of thorough testing campaigns, which are essential to guarantee the safety of any new aircraft. The Boeing 777X test beds resumed operations in early September, and the certification process continued.

The IAM Strike, Layoffs

In September, more than 33,000 members of the International Association of Machinists and Aerospace Workers employed by Boeing went on strike for the first time since 2008. 96% of the employees voted to strike, rejecting a contract promising a 25% pay raise. 

The strike temporarily halted the Boeing 737, 767, and 777 production lines, costing the company an estimated 5 billion dollars. On November 4, after 59% of the union members agreed to the new contract, the strike ended. 

On October 12, Boeing announced plans to cut 17.000 jobs, about 10% of its global workforce, to align with its new financial reality. On the same day, the company announced further delays to the 777X program, with the airliner expected to be delivered in 2026. The announcement did not come without the frustration of some key airlines, including the largest customer, Emirates (EK). 

At the launch event of EK's new A350, its president, Sir Tim Clark, expressed his disappointment with Boeing’s performance on the Triple Seven X program. Of the 205 units on order, he mentioned that the airline should be flying dozens of aircraft by now and expressed concerns about the Boeing 787 deliveries.

The news of the layoffs was followed by a significant share sale, valued at nearly US$19 billion, to address cash-flow issues. This was due to Boeing’s poor financial performance in the third quarter, with a reported net loss of US$6.1 billion.

Even before the strikes, news of delivery delays kept coming, the most notable being flydubai (FZ). The Dubai-based carrier announced it was significantly impacted by the missing Boeing 737 MAX, which led to a worse financial performance and passenger experience in 2024.

Commercial Orders

Commercially, Boeing missed out on potential deals with Riyadh Air (RX), EVA Air (BR), and other airlines while scoring orders from EK, El Al (EY), and Qatar Airways (QR). In 2024, Korean Air (KE) and Ethiopian Airlines (ET) expanded their wide-body fleets with up to 20 Boeing 777X each.

In December, a sizable order from Pegasus Airlines (PC) increased the Boeing 737-10 backlog by up to 200 units, allowing the manufacturer to close the year positively. 

If 2024 was not an easy year for Boeing, all the bad luck will eventually end if they get their act together in Crystal City. Under the new leadership, the company has shown its resilience and adaptability, facing arguably the most challenges and changes since its merger with the McDonnell Douglas Corporation. 

As Airbus' CEO stated, the aviation industry, including competitors, needs Boeing to do well to ensure the forecasted passenger growth is achieved. We hope Boeing does indeed, specially after a year that is set to mark a distinct shift from what came before.

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