2024-02-09 13:37:51
The American aircraft manufacturer often makes the headlines but not for the right reasons. Boeing is facing a series of incidents on its planes. Doors that detach in mid-flight, defects on the fuselage of several models or even, we remember, fatal crashes in 2018 and 2019. The fault of one model: the 737 MAX.
If Boeing’s problems had a name, it would be 737. It is the flagship model of the American aircraft manufacturer. Its latest version, the 737 MAX, is an essential aircraft in the group’s economic strategy. Its strength is that it can accommodate more passengers, it consumes less kerosene, and above all, its range is greater than the initial version of the 737.
It is for these elements that it is in high demand. Since its entry into service 7 years ago, more than 1,500 737 MAXs have been delivered. And the order book is full for Boeing since 5,000 aircraft have yet to leave the Seattle assembly site… this despite order cancellations after the various known incidents on this model.
Boeing which must therefore produce more, faster, and above all well. Except that with the numerous problems encountered on this type of aircraft in recent months, production of the 737 MAX, after having been slowed down, is stopped at the request of the American authorities. This is bad news since Boeing’s ambition is to increase the size, namely to go from 38 aircraft of this type delivered per month to 50.
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50,000 commercial planes in the sky in 2044
An increase in the rate of production to meet ever-increasing demand from the air sector: the number of commercial aircraft in service will double by 2044. This is certainly in 20 years, but it is practically tomorrow. Ultimately, it should reach just under 50,000 devices in service.
This is therefore a big issue for aircraft manufacturers, including Boeing. You have to be competitive, efficient, responsive, but also cheap. Especially since the world leader, the European Airbus, Boeing’s main competitor on the market, also meets these criteria. So there’s no question of letting yourself fall further behind.
The 2P dilemma
So, we wonder. Is it this race for market share and sales that is the source of Boeing’s problems? Because certainly, responding to demand is one thing. But shareholders must be reassured to ensure comfortable dividends. And to be competitive, Boeing has the particularity of delegating and subcontracting, particularly with regard to the quality control of its aircraft. Negligence in this aspect could explain the manufacturer’s poor workmanship and numerous setbacks.
This is the dilemma of the 2 Ps: produce or protect, that is to say finding a balance between delivering a lot of planes, as we have seen the issue is essential, and at the same time ensuring the maintenance of quality standards.
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However, and surprisingly at the moment not as much as one might believe, this does not affect the health of Boeing. 2023 was a historic year for the American in terms of orders. Financially no drama either. Certainly, with each announcement of technical problems, the action on Wall Street plunges, but nevertheless, if we refine over a year, the stock market value of Boeing has only lost 10%. In any case, the demand from companies is such that Boeing remains essential.
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