Washington’s Federal Aviation Administration (FAA) has tightened its grips on Boeing. The regulator is undertaking much tougher audits following a blowout on a B737 MAX in January, blamed on assembly failures. It imposed a production cap of 38 jetliners a month and announced stepping up factory checks at the manufacturer’s Renton plant.
The FAA’s patience with Boeing has ended. Repeated technical glitches with the B737 MAX in the recent past, blatant production errors and sloppy technical controls by Boeing’s own experts have alarmed the authority. It came under increasing criticism itself and was accused by aviation experts and media of treating Boeing too leniently. Now the wind has changed. Gone are the days when technicians and safety experts from the aircraft manufacturer were allowed to carry out the final inspection of passenger and cargo aircraft themselves and only had to provide the FAA with documentary evidence of the results of the final technical and operational checks.
Increasing budget gap
The reduction in the monthly production rate that has now been ordered, is tearing a big hole in the manufacturer’s coffers. Frame makers get paid for their jetliners upon delivery. The underlying production rate dictates the pulse of an industrial system feeding thousands of aerospace suppliers worldwide. Hence, Boeing’s production slowdown is expected to ripple through the airline industry, with carriers scrapping flights from their schedule or prolonging existing jet leases to meet demand.
In addition, any prolonged output slump has potential repercussions for engine maker CFM International, co-owned by newly standalone supplier GE Aerospace and France’s Safran. As sole engine supplier for the MAX, CFM gets paid for the turbines once a fully assembled aircraft is delivered to an airline and not when aircraft parts are handed over to Boeing or, in case of Airbus jetliners, to its European rival.
Falling further behind Airbus
With FAA ordering Boeing to sharply cap MAX production, enabling Washington’s inspectors to check if industrial operations are working smoothly, Boeing falls further behind its arch-rival. In the single-aisle category, Airbus already has a comfortable lead which will now be extended.
News agency Reuters cites Rob Morris, Global Head of Consultancy at Cirium Ascend, who said that 11 MAXs were finished by Boeing in February, following 13 in March. The rate peaked around 38 a month in mid-2023, Cirium data shows.
Airbus, in contrast, produced an average of 46 jets a month of its competing variant A320neo in the first quarter, Morris said.
Boeing customers getting nervous
Due to the string of mishaps that have severely damaged Boeing’s reputation, and led to a management shakeup, some airlines are considering canceling earlier orders and switching to Airbus models. But it is not all is running smoothly at the European aircraft manufacturer, either. Hit by supply chain disruptions, the production rate of the A320 variants could not be ramped up as quickly as originally announced by management.
