737MAX: Boeing Speaks To The Press For First Time Since October 2019: PR Repair Time?

LONDON – In a first since October 2019, Boeing spoke to Dominic Gates of The Seattle Times earlier this month to discuss the manufacturer’s challenges.

Exclusive interviews with Boeing Commercial Airplanes CEO Stan Deal and Boeing's chief engineer Greg Hsylop.
After almost three years of crisis, with Boeing still facing immense challenges, we talk about the legacy of the MAX crashes and what's aheadhttps://t.co/4bnSIvBVCV
— Dominic Gates (@dominicgates) January 4, 2022

There were some things to take from this interview, as well as determine whether this is the beginning of a potential PR positivity campaign to get the manufacturer back to the position it was in post-Crisis.

What we learnt from this interview

One big thing that we learned from this interview is still some form of avoidance on MCAS with the MAX, which started this crisis in the first place.

Gates asked how Boeing missed the MCAS’ glaring flaws, and Boeing’s Chief Engineer Greg Hyslop stated that “I’m not gonna answer that question” (Gates, 2022).

The Boeing Commercial Airplanes CEO Stan Deal stated that the manufacturer seeks to “create a just culture… not a punitive culture” and to look at “why were the mistakes made [and] what learning can be taken away” (ibid).

Photo Credit: Vincenzo Pace (@aerovincenzo on Instagram)

Hyslop did add that “the reorganization at Boeing prompted by the MAX crashes will strengthen and elevate engineering in the company”, offering a glimmer of hope that no such thing will happen again (ibid).

Deal also believes that he should be able to “clear the bulk of the remaining backlog” this year, which represents around 370 MAX aircraft, based on October 2021’s numbers (ibid).

The MAX crisis, linked up with the pandemic has resulted in Boeing having to cut around 15,000 jobs in the Washington state area alone, but Deal also remains confident that he will “several thousand people here this year” (ibid).

“The future as I see it for Boeing is actually very bright,” Deal said (ibid).

As Gates rightly mentions, Boeing is still going to be behind in the catch-up against Airbus’ A320neo Family aircraft, with the European planemaker sticking to its production target of “building an unprecedented 63 per month in 2023” (ibid).

Boeing will only start with 31 per month, with plans to “ramp up cautiously from there” (ibid).

Is this the beginning of a new PR campaign for Boeing?

From orders to complete disarray with some customers over the MAX, this interview could definitely be seen as the start of a new PR campaign for Boeing.

Evidence that substantiates this view is through some news stories that have occurred in the last few months, including Boeing’s potential response to counteract any negative PR.

This is obviously all down to “Boeing [previously misleading] regulators and kept information from pilots about risks in the plane’s software” (NPR, 2021).

Of course, it has gone beyond this, especially from Ryanair’s CEO Michael O’Leary, with Boeing “walking away in September after the two couldn’t agree on terms” regarding a follow-up order, with O’Leary deeming Boeing’s prices as “delusional” (Hetzner, 2021).

“Boeing is losing customers all over the place,” he said in prerecorded comments to investors following its fiscal second-quarter results through the end of September (ibid).

Although Boeing turned over its “first profit in almost two years” (Ajmera & Johnson, 2021), this was very quickly overshadowed by judges in the United States approving “Boeing Co’s agreement to acknowledge liability for compensatory damages” over the Ethiopian Airlines Flight 302 crash, which of course garnered more attention (Shepardson, 2021).

By September 2021, the chief technical pilot of the 737 MAX program, Mark Forkner, was to be “criminally charge[d]”, as Forkner “served as the plane maker’s lead contact with the Federal Aviation Administration for how airline pilots should be trained to fly the new jet” (Michaels & Tangel, 2021).

As mentioned previously, 2021 was the year in which Boeing wanted to deliver around half of the 425 completed 737 MAXs in its inventory by year-end. “Instead, it has only reduced its 737 MAX inventory by about 55 units year to date”, with “the slow pace of 737 MAX deliveries… weighing on Boeing’s cash flow and delaying its efforts to repair its balance sheet” (Levine-Weinberg, 2021).

It does appear that despite this, Boeing is making some momentum and is learning from its PR woes.

Around a year ago, Boeing’s Vice President of Global Media Relations and Public Affairs, Gordon Johndroe admitted that the manufacturer needed more preparation when it came to PR-based events like this.

“We have plans that allow us to act in a 24/48/72-hour situation. With the MAX, the playbook ran out after a few days, and we were in unprecedented territory. We need to plan for beyond 72 hours. You need a cadre of people within your organization who have media relations as a backup skill set… so the core team can catch their breath” (Beaubien, 2021).

And now, we are seeing more positive elements of press being released about the 737 MAX, with there being four main stories that are to be used as an example.

The first bit of positive news came from Akasa Air at the Dubai Air Show where it placed an order for up to 72 737 MAX aircraft, which “for Boeing… is very good news… and will place some positive sales PR on an aircraft program that has been scathed by crisis after crisis” (Field, 2021).

Then in December 2021, two positive elements of news came for the manufacturer, with Ethiopian Airlines planning “to resume flying Boeing 737 MAX planes on its fleet in February 2022, saying it was satisfied with their safety” (Reuters, 2021) as well as Indonesia lifting a ban on the aircraft type, paving the way for Lion Air to begin operations once again (Christina, 2021).

But of course, another big news for Boeing came around four days ago, with Allegiant Air making an incredibly massive switch from Airbus to the American manufacturer with an “order for up to 100 737 MAX aircraft”, of which “the deal consists of 50 firm units, with options for an additional 50” (Field, 2021a).

The point raised with this is that those four announcements, coinciding with the first interview with a member of the press in nearly three years, can be described as the newest PR campaign that will hope to elevate the manufacturer back to some form of a normal standing in 2022.

What should Boeing’s outlook be for 2022?

The outlook for Boeing has been predicted by analysts ever since March 2019. As Eric Dezenhall, the CEO and founder of Dezenhall Resources mentioned to Vox, the manufacturer will survive this.

“Boeing is going to survive, but they’re not going to look good in the short term,” he said. “They have the leadership, the resources, and the diversification to survive. What I always tell clients in these situations is, ‘Don’t look for praise anytime soon’” (Del Valle, 2019).

Despite that quote being from 2019, we are still in the short term at present. This crisis could have gone on for a lot longer than it has, and Boeing has judged that well to their credit.

Acknowledge the liability, pay the damages, learn some lessons and then move on. Whilst Boeing is trying to learn such lessons still, the manufacturer has a good opportunity to sort themselves out in 2022, and to attempt to make up such ground on Airbus.

However, the first problems have arisen already, with “A U.S appeals court on [January 7, 2022] [reviving] a pension plan’s 2019 shareholder lawsuit against Boeing Co officers and directors alleging they had made false public statements about the 737 MAX” (Shepardson, 2021a).

This will be in Boeing’s interest to solve quickly, as it will result in more money lost.

For now, the focus on 2022 will be on the 737 MAX 10 as they are not in agreement with analysts about the need to design another aircraft type.

“I’m not in a rush right now,” Stan Deal said in the interview with Dominic Gates. “There will be a next new airplane. The when, the how, the where have yet to be answered.”

“Both he and Hyslop said their focus now is not on designing that next new aircraft but on perfecting the digital modeling technology that Boeing plans to use to simulate the design and manufacture of future planes before any assembly lines are built” (Gates, 2022).

Another area of focus is of course building through the Metaverse as well as the roll-out of the 777X which is due to take place over the next 12-18 months.

On top of this, it then has to contend with manufacturing defects on the 787 as well and ensure that it doesn’t get replicated into different areas of the family programs respectively.

You can also tell that Boeing is taking this seriously on the 787, with Deal mentioning to Gates that he is “not going to rush my regulator” (ibid), “referring to the FAA, which is closely scrutinizing Boeing’s proposed fixes to ensure that every plane meets the required technical specifications” (ibid).

Overall

What remains clear is that Boeing in 2022 is going to be a busy year for them. From obviously resuming deliveries to pre-crisis levels, to trying to establish consumer confidence again is going to be a big challenge.

Boeing believes that building another aircraft type differently from the MAX is the way to go at present, but as Airbus continues to dominate in that market, it may not give the manufacturer a choice in the matter.

For Deal & Hyslop, it will be interesting to see how they will steer the behavior of the company this year, with there to be a significant expectation on more involvement by the FAA on certification.

Such actions, will slowly but surely, mold Boeing into the company it needs to be and should have been from the very beginning of this crisis.