NewsWhats happening
Shareholders’ suit citing internal Boeing documents alleges board didn’t act as fast on safety as CEO David Calhoun said
The MAX crisis and coronavirus pandemic have prompted Boeing to cut production. A Boeing 737 MAX on the assembly line in 2019. When Boeing Co. board had its first formal meeting around seven weeks after the initial 737 MAX crash in late 2018, directors didn’t hold in-depth discussions about the jet’s safety, according to newly released details of internal company documents.
Months later, Boeing’s current chief executive told journalists the company’s directors had moved quickly to address the accident, according to excerpts of company documents contained in a shareholders’ lawsuit.
That and other new information in the suit cast doubt on whether Boeing directors pressed management about safety problems or seriously considered grounding the plane before a second 737 MAX crash in early 2019.
Parts of the internal Boeing documents, which indicate dates and particulars of meetings the directors held and what was discussed, are cited in the shareholders’ action claiming directors breached their fiduciary duties in overseeing management. The suit also alleges David Calhoun, then the lead-director who later became CEO, exaggerated to journalists the degree to which directors attended to safety concerns between and in the wake of the two crashes.
The suit alleges that Mr. Calhoun, who became CEO in early 2020, conducted a public-relations campaign that “insisted the board acted with more urgency and was more engaged than it actually had been” following the two crashes that killed 346 people in October 2018 and March 2019. The suit cites internal Boeing emails and other documents that weren’t previously public.
Excerpt from WSJ
Read the full article
Jet maker may be reviving plans for a new aircraft to serve medium-haul flights, but the story of the Boeing 757 shows that timing can be everything
Boeing’s ambitions for a midrange plane may be the right idea at the wrong time—again. Last year, the Chicago-based manufacturer started conversations with customers about building such a jet with a single-aisle cabin. Then, during the fourth-quarter earnings presentation in late January, Chief Executive David Calhoun all but confirmed that the company’s next jet would indeed address the “middle of the market” between long international flights and short-haul domestic ones.
This appears to end speculation that Boeing could prioritize a replacement for the troubled 737 MAX, which is now flying again. It is a good call not to undermine MAX sales with talk of a substitute.
Last week, the buzz increased after trade journal Aviation Week reported that the new jet could instead be a two-aisle model, reviving the so-called New Midsize Airplane project that Boeing abandoned when Mr. Calhoun took over last year. This time, though, the program wouldn’t just have two variants seating 225 and 275 people, but also a third, smaller one.
Excerpt from WSJ
Read the full article
Beijing says it lodged complaints about questioning of arriving workers about Communist Party membership
HONG KONG—China accused American officials of harassing Chinese airline and shipping crews that arrive in the U.S. in attempts to single out Communist Party members, and warned that Beijing may retaliate against Washington for what it considers to be provocative behavior.
Chinese Foreign Ministry spokeswoman Hua Chunying said U.S. law-enforcement personnel have recently conducted surprise raids on sailors aboard arriving Chinese ships and questioned arriving Chinese airline crews to ascertain whether they are members of the Communist Party. She didn’t offer details.
Ms. Hua, speaking at a routine briefing on Monday, denounced such enforcement actions as a severe political provocation designed to “provoke ideological confrontation.”
Excerpt from WSJ
Read the full article
Airport screenings were elevated this weekend, and some chose to drive rather than fly
Many would-be fliers opted to remain at home or drive. Travelers at O’Hare International Airport in Chicago on Sunday.
The weekend after Thanksgiving met expectations that it would be the busiest travel period in the U.S. since the coronavirus pandemic began, aided by clement weather and lower gas prices that encouraged some to drive rather than fly.
Almost 50 million people were expected to have made a journey during the Thanksgiving holidays, said AAA, despite tightening local clampdowns and warnings from federal health officials. The U.S. Centers for Disease Control and Prevention on Nov. 19 recommended people not travel over Thanksgiving.
The number of travelers from Nov. 25 through Nov. 29 was down more than 10% from a record set last year, according to AAA, which includes flights and road trips of more than 50 miles. Airlines, which boosted capacity earlier in the month only to trim flying when cancellations started to climb in recent weeks, said traveler numbers were in line with their revised expectations.
Excerpt from WSJ
Read the full article
Carriers are positioning doses for quick distribution if vaccines are approved by regulators
The flights are one link in a vast global supply chain being assembled to tackle the logistical challenge of distributing Covid-19 vaccines.
United Airlines Holdings Inc. UAL -0.55% on Friday began operating charter flights to position doses of Pfizer Inc.’s PFE 2.90% Covid-19 vaccine for quick distribution if the shots are approved by regulators, according to people familiar with the matter.
The initial flights are one link in a global supply chain being assembled to tackle the logistical challenge of distributing Covid-19 vaccines. Pfizer has been laying the groundwork to move quickly if it gets approval from the Food and Drug Administration and other regulators world-wide.
Pfizer’s distribution plan also includes refrigerated storage sites at the drugmaker’s final-assembly centers in Kalamazoo, Mich., and Puurs, Belgium, and expanding storage capacity at distribution sites in Pleasant Prairie, Wis., and in Karlsruhe, Germany, in addition to dozens of cargo flights and hundreds of truck trips each day.
Excerpt from WSJ
Read the full article
Pilots accept lower pay to prevent over 1,700 furloughs as pandemic roils airline industry
Delta Air Lines Inc. pilots agreed to accept reduced pay in exchange for job security until 2022, as the industry continues to grapple with reduced travel demand due to the coronavirus pandemic.
Delta and the union that represents its pilots said Wednesday that the cost-cutting agreement would prevent the more than 1,700 pilot furloughs the carrier had originally planned. Under the agreement, pilots who would have been furloughed will receive pay for 30 hours a month, though they won’t have to fly. Delta would also be able to reduce pilots’ minimum guaranteed work hours by as much as 5%, which results in lower pay, and the company agreed not to carry out furloughs until Jan. 1, 2022.
“Pilots, as long-term stakeholders in our company, have stepped up to the plate once again to help Delta weather this crisis,” said First Officer Chris Riggins, a spokesman for the union that represents Delta’s pilots.
Airlines have had to shrink to match a diminished outlook for travel demand. The global airline industry is forecast to lose $38.7 billion next year even if Covid-19 vaccines and testing help reopen more borders, the International Air Transport Association said earlier this week.
Excerpt from WSJ
Read the full article
The U.S. on Wednesday approved Boeing Co.’s 737 MAX jets for passenger flights again after dual crashes took 346 lives, issuing a set of long-anticipated safety directives and notices to airlines globally that will help resolve the plane maker’s biggest pre-pandemic crisis.
The Federal Aviation Administration’s official order to release the MAX, grounded since March 2019, came as the Chicago aerospace giant grapples with a host of new problems in the midst of the continuing health crisis.
The FAA’s mandate allows Boeing to resume delivering the jets to airlines and lets them carry passengers, pending completion of certain mandatory fixes and additional pilot training requirements spelled out in related documents also released by the agency. U.S. carriers said Wednesday that they would broadly reintroduce the MAX into their schedules starting early next year, while FAA chief Steve Dickson said he expected approvals from some foreign regulators within days.
But the pandemic has sapped demand for air travel, prompting airlines and aircraft-leasing firms to cancel about 10% of Boeing’s outstanding MAX orders this year. Boeing has said it believes hundreds more of its remaining 4,102 orders could be in jeopardy because of the financial health of some customers.
Excerpt from WSJ
Read the full article
Even after the 737 MAX gets cleared for takeoff, the plane maker will have a hard time delivering it to customers
It seemed difficult to imagine a worse year for Boeing BA 2.80% than 2019—until 2020 came along. What should worry investors now is that the long-awaited 2021 return to grace is slipping away.
On Wednesday, the Chicago-based plane maker reported a $466 million loss for the third quarter. Revenues came in 29% lower due to the Covid-19 crisis, even though the prior-year period was itself badly hit by the grounding of Boeing’s 737 MAX jet in March 2019. However atrocious, the results were better than analysts were expecting: Boeing stock fell about 3% in afternoon trading, in line with the broader equity market’s poor performance Wednesday.
Like other companies in the aerospace industry, Boeing is taking steps to cut costs to face years of depressed travel demand. It is closing the original 787 Dreamliner assembly line in the Seattle area; the model will only be made in the lower-cost South Carolina plant from mid-2021. And Chief Executive David Calhoun wrote to employees Wednesday that a further 11,000 jobs will be cut by the end of 2021. He also plans to get rid of 30% of office space, echoing what peers such as Raytheon have said.
Excerpt from WSJ
Read the full article