Boeing Chair Scheduled for Discussions with Key Airline Customers, CEO Not Included, Sources Share

Major airline executives are planning to engage in discussions with Boeing’s board chair, Larry Kellner, omitting CEO David Calhoun from the meetings. This decision comes in the aftermath of an Alaska Airlines mid-air emergency and persistent production issues, sources familiar with the matter disclosed.

A group of U.S. airline CEOs sought meetings with Boeing directors to express their apprehensions regarding the recent Alaska Airlines 737 MAX 9 incident. According to the Wall Street Journal, this move signifies an unusual level of frustration with Boeing’s ongoing challenges and its CEO, Calhoun. An airline source, privy to the meetings, revealed to Reuters that the carriers aimed to address their concerns directly with Kellner, a former CEO of Continental Airlines, who can empathize with their frustrations regarding continual delays and quality concerns.

In the U.S., the CEOs of American Airlines, United Airlines, Southwest Airlines, and Alaska Airlines intend to hold discussions with Kellner, as per another airline source. These talks, anticipated to involve at least one additional Boeing director, will also include some major foreign airline clients, according to sources familiar with the situation, who spoke on condition of anonymity. While Boeing CEO Dave Calhoun supports these discussions, he will not participate, as confirmed by a company official.

A Wall Street analyst expressed skepticism about the decision to exclude Calhoun from the meetings, indicating potential implications for his tenure at the company. However, the analyst chose to remain anonymous due to the sensitivity of the matter. Boeing emphasized its proactive approach to listening to its customers across various levels within the company.

American, United, and Alaska Airlines declined to comment on the matter. Southwest Airlines stated that it maintains regular communication with Boeing and sees no changes in that regard. Calhoun, who assumed the role of CEO in 2020 following two fatal 737 MAX 8 crashes, has pledged to address quality issues and prevent incidents like the recent mid-air emergency on Alaska Airlines from occurring again.

Michael O’Leary, the CEO of Ryanair, Boeing’s largest European customer for the 737 MAX aircraft, disclosed to Reuters on Wednesday that he was holding discussions with senior company executives in Dublin to address prolonged delivery delays.

The backlog of orders and delays in receiving planes have become a source of frustration for airline executives. As a result, some airlines have begun reducing routes and exploring alternative options to meet the anticipated surge in passenger demand this spring.

Federal Aviation Administration (FAA) chief Michael Whitaker emphasized on Tuesday that Boeing must enhance its safety culture and address quality concerns before the agency approves any increase in 737 MAX production. The FAA took the unprecedented step in late January of informing Boeing that it would not permit an expansion of 737 MAX production following the Alaska Airlines mid-air emergency incident.

Whitaker clarified that the FAA will only authorize a production increase once Boeing demonstrates a safely operating quality system. He asserted that the FAA possesses the necessary tools to hold Boeing accountable and intends to utilize them fully.

Currently, Boeing is permitted to manufacture up to 38 737 planes per month, although the actual current production rate is lower than that, according to Whitaker. Boeing’s Chief Financial Officer, Brian West, acknowledged on Wednesday that the company had opted to limit production rates on the 737 program and anticipates feeling the repercussions of this decision in the coming months.

In a separate development, the Justice Department has initiated a criminal investigation into the cabin panel blowout incident involving the MAX 9 aircraft in January. The National Transportation Safety Board has revealed that the aircraft in question was missing four crucial bolts.