• Fri. Mar 1st, 2024

Boeing’s Failed Fuselage Component Blowout Leaves Suppliers and Airlines in the Dock: A Lesson Learned for Boeing, Spirit AeroSystems, and Alaska Air


Feb 13, 2024
Boeing’s stock decreases as Max deliveries decline

Boeing (BA) recently reported that its orders in January had dropped to the lowest level since September, which can be attributed to groundings and delays linked to a fuselage component blowout on an Alaska Airlines jet on the 5th of January. This incident averted a potential disaster but further exacerbated issues at Boeing’s factories. The year 2022 was fraught with quality concerns that negatively influenced the relationship between Boeing and fuselage and cockpit components supplier, Spirit AeroSystems (SPR).

During the Q4 conference call on January 31st, Boeing’s CEO Dave Calhoun remarked, “I’m sort of glad they called out a pause because that’s a good excuse to just take our time, do it right.” This comment came after it was found that Boeing was responsible for missing or incorrectly installed bolts during the January 5th incident. Additionally, the National Transportation Safety Board found that Spirit had improperly drilled holes in some cases. As a result, the FAA halted planned production increases at Boeing until they were sure that the quality control issues were resolved.

Alaska Air responded swiftly to the incident and managed to prevent a disaster. However, this response further exacerbated issues at Boeing’s factories. Despite being down 23% from the December high, Boeing stock was nearly 2% lower near midday Tuesday. On the other hand, Spirit stock fell 1.9%, as they were recovering after shaping an eight-week cup base.

In conclusion, while Alaska Air’s response helped prevent catastrophe in January, it also led to additional challenges for Boeing due to factory shutdowns and quality control issues with suppliers such as Spirit AeroSystems (SPR). As a result, both companies faced significant setbacks in terms of production and stock performance in early 2022.

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