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What’s Next for Boeing?, by Travel Radar Correspondent David Hopwood

  1. Get the MAX flying
  2. Forget the New Midsize Aircraft
  3. Restore reputation
  4. Develop a 737 replacement

When the new CEO of Boeing David Calhoun took over from Dennis Muilenburg earlier this month, he faced an Everest of problems, the first of which was (no surprise here) the 737-MAX debacle.

David Calhoun ©Boeing

The consequences of the two fatal crashes were many and severe; how to get the aircraft ‘ungrounded’, how to keep shareholders happy-or at least not too nervous, how to repair the relationship with the FAA, how to preserve the technical capability amongst the suppliers—and keep them in business, how to regain the trust of operators, of passengers and so on and so forth.

Although much delayed, the first test flights of the 777x appear to have been successful and as a result the share price of Boeing regained some of its lost value—a much needed piece of good news for the manufacturer. On the other hand, a few days ago Boeing declared a loss for 2019 of $638 million and a bill for the grounding of the MAX of $18 billion. One could expect that the investors and shareholders expected a poor result, and so already discounted the losses. It was quite clear that Boeing themselves were anxious, given them looking for a loan of about $10 billion earlier this month.

Ethiopian 737 Max ©BBC.com

Since commercial aircraft manufacturers operate in decades rather than months, all of these issues can be seen as short-term, or at the very most medium-term. The failure to address them were the undoing of Muilenburg and no doubt Calhoun will be judged by the same standard.

But what of the future—perhaps five years hence? Well, Calhoun has clearly and rightly begun to focus Boeing’s attention. Very few people are massively enthusiastic about spending their days fixing major problems, certainly not those of other peoples making; a necessary evil at best. For Boeing engineers and designers the new, interesting and enjoyable work was the New Midsize Airplane (NMA) and the Future Small Airplane. (FSA)

The NMA/797 ©airlineratings

The NMA has been discussed for some time; an aircraft with about 270 seats and a range of 7400-9300 km range; a direct competitor with the Airbus A321XLR. Calhoun has firmly said no. ‘We will not design our next airplane on the basis of the A321,’ he said. This seems reasonable. The MAX was designed and powered in reaction to the success of the A320neo, not least with American carriers, which Boeing sees as its home market. The decision–to upgrade the 737 beyond the limits of a 50-year-old design–was its undoing.

The NMA was intended to serve as the production/design platform for the 737 replacement, the FSA. The problem is that the A321XLR is ready now, with delivery in perhaps two years’ time. So, the long lead time for the NMA, added to a degree of mistrust would leave Boeing playing catch-up again.

Iberia A321XLR ©insideflyer

Also the A320 family is getting older. While the Airbus shows no signs of running out of potential right now, by concentrating on the new FSA  and dropping the NMA project, Boeing could regain the industry lead, and with a larger variant might be able to compete with the A321XLR, just as operators are looking for replacements.

This may well be Calhoun’s plan; get the MAX flying. Restore some reasonable returns to shareholders. Rebuild trust. Forget the NMA. Focus on the FSA. In that order.

Time, as they say, will tell…

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