Airlines Vow to Hold Boeing ‘Accountable’ Over Quality Issues as Carrier Warns of $150 Million Loss

Multiple major airlines vowed this week to hold plane maker Boeing accountable following the grounding of 737-9 MAX planes earlier this month.

Alaska Airlines N704AL, a 737 Max 9, which made an emergency landing at Portland International Airport on January 5 is parked on the tarmac in Portland, Oregon, on January 23, 2024. One of two door plugs on the emergency exit door blew out shortly after the plane took off from Portland. No fatalities or injuries were reported. The US Federal Aviation Administration (FAA) announced January 11 it was launching a safety probe into Boeing's quality control. Photo by Patrick T. Fallon / AFP

Multiple major airlines vowed this week to hold plane maker Boeing accountable following the grounding of 737-9 MAX planes earlier this month.

Chief executives at American Airlines and Alaska Airlines made the comments after the Federal Aviation Administration (FAA) grounded all of the jets worldwide earlier this month in the wake of a mid-air incident on Alaska Airlines Flight 1282 that raised major safety concerns.

“We’re going to hold them accountable. Boeing needs to get their act together,” American Airlines Chief Executive Robert Isom told analysts during a conference call on Jan. 25, Bloomberg reported.

“The issues they’ve been dealing with, and going back some years now, is unacceptable.”

Elsewhere, Alaska Air Group said Thursday that the grounding of its Boeing 737-9 MAX fleet will cost the company roughly $150 million owing to ticket reimbursements, placing passengers on new flights, and paying staff overtime to navigate thousands of canceled flights.

Potential future delivery delays are also set to impact the airline, which operates an all-Boeing 737 fleet, the company said.

The airline’s Chief Financial Officer Shane Tackett said during a conference call discussing its 2023 financial results that the company expects to be “made whole for the profit impact of the grounding,” the Seattle Times reported.

During the same call, Alaska Air Group CEO Ben Minicucci also vowed to hold Boeing accountable, according to the publication.

“It’s not acceptable what happened. We’re gonna [sic] hold them accountable. And we’re going to raise the bar on quality on Boeing,” Mr. Minicucci said. “We’re gonna [sic] hold Boeing’s feet to the fire to make sure that we get good airplanes out of that factory.”

FAA Bans Production Expansion

Flight 1282 was en route to California from Portland International Airport in Oregon on Jan. 5 when the door plug—a two-by-four foot panel covering an unused emergency door on the jetliner—blew out, leaving a gaping hole in the plane and causing a rapid loss of cabin pressure.

The plane was forced to make an emergency landing back in Portland with 171 passengers and six crew members on board, although none of those on board suffered serious injuries.

The incident prompted the FAA to ground the Boeing 737-9 MAX planes worldwide, with the agency extending that grounding just days after United Airlines said it discovered issues related to the installation of door plugs—including loose bolts—on the same Boeing model.

On Wednesday, the FAA granted approval for an inspection process that would allow the grounded aircraft to return to service following what it said was an “exhaustive, enhanced review” that left the agency with “confidence to proceed to the inspection and maintenance phase.”

However, the agency banned Boeing from expanding the output of its troubled 737 MAX series, noting that production expansion would not be given the green light until officials are “satisfied that the quality control issues uncovered during this process are resolved.”

The announcement saw Boeing’s shares slide around 6 percent.

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, Ore., on Jan. 7, 2024. NTSB/Handout via Reuters

‘Some Anxiety’ Will Linger After Grounding Lifted

Still, during Thursday’s conference call, Mr. Minicucci shared his optimism regarding the outlook for Boeing and its 737-9 MAX jets, noting that he believes customers will ultimately continue to fill up the planes once federal regulators complete safety inspections and ensure quality control issues are resolved.

“At first people will have some questions, some anxiety,” about the MAX, he said. “But I believe over time the confidence will get back into this airplane.”

The comments from officials at the two airlines come after Southwest Airlines—one of Boeing’s loyal customers—said it planned to take fewer deliveries of Boeing’s 737 MAX aircraft in 2024 and is removing the Boeing 737-7 MAX planes from its fleet plans.

The U.S. budget carrier expects to take delivery of 79 MAX aircraft this year, compared with its previous estimate of 85, citing supply chain issues and the current status of the MAX 7 certification.

“The company’s current capacity plans do not assume placing the MAX 7 in service this year and is subject to Boeing’s production capability,” Southwest said in a statement.

Meanwhile, United has said the yet-to-be-delivered MAX 10 planes set to be added to its fleet plan will likely face delays and Boeing will not be able to meet its contractual deliveries on many of those planes.

Speaking during a Jan. 23 earnings call, United CFO and EVP Mike Leskinen called the recent grounding of Boeing’s 737-9 MAX plane “the kind of straw that broke the camel’s back.”