CASE PROBLEM

Boeing $737$ MAX

The Boeing $737$ MAX is a popular narrow$-$body aircraft known for its fuel

efficiency and range. It delivers enhanced efficiency, improved

environmental performance and increased passenger comfort to the singleaisle market. Incorporating advanced technology winglets and efficient

engines, the $737$ MAX offers excellent economics and significant

improvements over its predecessors, reducing fuel use and emissions by $20$

percent while producing a $50$ percent smaller noise footprint. It is one of the

best & most demanded aircraft in the world. With more than $5,000$ orders,

the $737$ MAX is the fastest$-$selling airplane in Boeing$$s history.

CASE PROBLEM

CASE PROBLEM

From Highs to Lows: Boeing's Safety Struggles &

$737$ MAX's Uncertain Future:

An outcry around safety at Boeing started with two deadly crashes within

five months of each other. In December $2018,$ a Boeing $737$ MAX aircraft

crashed in Indonesia, killing $189$ passengers and crew, while in March $2019$

another airplane of the same model crashed in Ethiopia, killing $157$ people.

Boeing $737$ MAXs were grounded worldwide for almost two years but were

eventually cleared to fly following revamps in design, software and crew

training. Five years later, the repeated safety incidents with Boeing are

sparking renewed concern.

Renewed Concerns and a Close Call:

On January $5$th$,2024,$ an Alaska Airlines Boeing $737$ MAX$-9$ flying from

Portland to Ontario, California was forced to make an emergency landing in

Oregon after a door plug blew off mid$-$flight, causing rapid decompression,

putting passengers at risk of oxygen deprivation. It was a close call. No one

was sitting next to the faulty door and the pilots were able to land the plane

with no passengers harmed but the incident opened a pandora$$s box of

questions and mistrust over the safety of Boeing aircraft.

A String of Incidents:

Within a couple of months, Boeing's reputation was further tarnished by a

series of unsettling occurrences. On March $4$th$,2024,$ a United Airlines $737-$

$900$ flying from Texas to Florida was forced to make an emergency landing

after flames erupted from one of the plane's engines. Just eleven days later,

on March $15$th$,2024,$ another Boeing aircraft, a $737-800,$ landed in Oregon

missing a crucial panel from its underbelly. These detrimental incidents

painted a troubling picture of potential systemic issues within Boeing's

manufacturing and quality control processes.

CASE PROBLEM

Consequences

The U$.$S$.$ Federal Aviation Administration $($FAA$)$ temporarily grounded most

of Boeing$$s $737$ MAX$-9$ aircraft following the Alaska Airlines incident. The

FAA eventually cleared the aircraft to fly again but with some restrictions.

The agency prohibited Boeing from expanding production of its MAX jets or

approving additional production lines for the aircraft. The FAA also audited

the production process for the aircraft, finding multiple instances where the

companies allegedly failed to comply with manufacturing quality$-$control

requirements.

This caused significant financial losses, production stoppages and

reputational damage. Current delays in aircraft deliveries and ongoing supply

issues already have operational and financial impacts on the aviation system

but they will be much worse if the aircrafts are grounded again. Furthermore,

incomplete certification documents and FAA audits revealing non$-$compliance

with manufacturing standards are still a major concern. This also led to a

change in the leadership of the company with the current CEO stepping down

at the end of the year.

These troubles will affect the price of the tickets and the fleet expansion

plans. Route development is going to be limited due to aircraft delays. There

is lack of market confidence towards Boeing and significant shareholder $$s

concern considering that the stock price is going down very fast.

This resulted in Boeing$$s arch rival, Airbus, clinching orders for $65$ jets from

two of Boeing's key Asian customers, Japan Airlines and Korean Air. This has

allowed Airbus to grow its foothold on a part of its rival's turf. Boeing$$s

issues regarding delayed deliveries, impacted financial targets and leadership

changes within the company has made it harder for them to catch up to their

European rival. $737$ MAX, considering it is still the world$$s best$-$selling

aircraft type, has more than $4,000$ orders and Airbus does not have capacity

to fill up eventual upsurge in orders.

The ongoing regulatory scrutiny is jeopardizing the company's

future financial performance and market position.

KEY DELIVERABLES

$1.$ With leadership changes, financial losses and a

shrinking market share, Boeing is at a crossroad.

Establish a comprehensive crisis management plan to

address immediate challenges arising from

recent incidents.

$2.$ Recommend actions to strengthen Corporate

Governance and ensure stability within the company.

$3.$ How can Boeing strategically revamp its business

strategy to outcompete Airbus, retain orders and

regain the lost market share?

$4.$ Boeing maintains a presence in both defence and space$-$tech exploration. with the ever evolving market landscape boeing needs a strategic decision. should it continue its diversified portfolio alongside its commercial jets or should it prioritize one sector for further investment?