David Calhoun Experiences More Challenges at Boeing

The aerospace business was a lucrative industry until the Federal Aviation Authority raised sticker regulatory control following two fatal accidents by Boeing. In 2019, a new Boeing 737 Max caused an accident that cumulative caused 346 deaths. As a result, The FAA grounded all Boeing 737 Max pending investigation into safety concerns raised by various stakeholders. An inquiry revealed that the plane had a problem with in-flight maneuvering characteristics. Boeing had to fix the issue and seek regulatory approval for its aircraft to fly again. Before the accident, Boeing had a positive reputation and had various pending orders for plane supplies. The grounding caused loss of business and lawsuits that affected its financial position further.

The board appointed David Calhoun in January 2020 to lead the company in fixing engineering, production, and management flaws. During his one and half year’s tenure, he has led Boeing to overcome the challenges, but others continue popping up. In 2021, the company expected to deliver an order of about 100 planes. However, David announced to investors that Boeing had discovered another flaw in its manufacturing, delaying plane delivery further. Since discovering the new problem, Boeing revised its production target to less than half of what it had projected to deliver by December this year.

Boeing 737 Max planes had created an enormous market, and their grounding was devastating to the company’s financial standing. Airbus, its main competitor, have increased their production and control of the market share. In the last month, Boeing’s share rose by five percent, whereas Airbus’s share grew by twenty-four percent. However, the company also experienced safety issues that brought plane delivery to a stop. When Investors tasked Boeing CEO to explain whether his company would rash to claim its position following Airbus new tragedy, David informed them that the company wishes to fix all their problems once and for all before embarking on full-time production. The move will allow the company to acquire 737 Max safety approval, hence flying again and creating more plane demand.

Some of the problems facing Boeing are beyond David’s control. The worsening of trade relations between China and the US negatively affected planes demand in Boeing’s fastest-growing market. Besides, the Covid-19 pandemic came with lockdown and movement restrictions, reducing passenger travel. Boeing has also to acquire approval from FAA for its 737 Max planes to fly again. However, the company’s strategy to entirely overhaul its operation to enhance safety could lead the organization back to profitability after announcing continuous losses for the past seven years. Boeing leadership continues to strike aircraft purchase deals with customers who still believe in its value. Lately, the company has received new orders from Ryanair Holdings and South West Airlines.

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