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Sunday Bites is back, tastier than ever. We’re exploring the 737 Max 9 door plug issues. We aren’t evaluating Boeing’s crisis response in this one (it’s par for the course).
We’re trying seeing how they got there in the first place.
Kyla Scanlon has a really crisp analysis on this. We came to the same conclusions.
A little clarification:
Spirit Aerosystems actually makes the door plugs for Boeing, and its investors filed a complaint before all this regarding quality issues of its parts.
737 Door Plugs: A Disaster Explained
These things have happened before. Why is it such a big deal this time?
Because it happened with American flights.
Contributing factors to the door plug fiasco
3 Important things to keep in mind:
Regulation dynamics: There’s a question out there that the FAA hasn’t been doing its job in ensuring Boeing produces safe planes. Also, the FAA allegedly has a culture where it views Boeing as a customer, rather than an organization it’s supposed to regulate.
Investor Expectations: Aside from building airplanes, Boeing is a publicly traded company. Cost cutting and revenue expectations are an enormous factor in the supply + production + delivery of airplanes.
Keeping up with the other guy: 10-ish years ago, Boeing was working to replace the 737, and then Airbus released the A320. So instead of building something new, it decided to tweak the 737. They cut corners. They were fined.
Factors which could negate any consequences for Boeing
It’s complicated, but not really. This has little impact on commercial trust because everyone’s painted into a corner.
Lonely Market: There are only 2 commercial aircraft manufacturers on this planet: Boeing and Airbus. Who you gonna get to build you an airplane…?
Higher Travel Demand: there’s projected to be a huge increase in 2024 travel.
This kinda says it all:
Richard Aboulafia, a longtime aerospace analyst and consultant, said if the blowout is traced to a manufacturing issue it would put more pressure on Boeing to change its processes, and cash-generating deliveries of new planes could be slowed.
Aboulafia said, however, he doesn’t expect any change in Boeing’s sales of the planes “unless the situation is worse than it seems.” Airlines are snapping up new, more fuel-efficient planes from Boeing and Airbus to meet strong demand for travel coming out of the pandemic.
Yeah yeah whatever… gimme the zinger
Usually, if a company messes up this bad, the market corrects itself by rewarding competitors that make safer products…
Well, making airplanes is hard as hell. There’s only 2 companies that actually do it (Airbus and Boeing). Both are publicly traded. Both are subject to investors’ scrutiny as business entities.
There’s a question that comes into play here about companies making absolutely essential things that require a high degree of precision…
Should those companies have a different profit-less incentive?
It makes sense, right? If you decide to base the system on quality + safety, you might get a safer airplane.
But it falls off the rails because production slows down, flights get more expensive, and older aircraft have to work harder + longer. Because you’re not paying attention to delivery volume, you’re paying attention to whether these things are safe.
Our verdict? Controlled chaos will continue…
What AI made this week
Sick Fits by Ahmed
When the crows feet were non-existent.
Ahmed + Pharma guy in 2015.
Have a great week!
Ahmed and Peter
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