A year ago today, things went from bad to worse for Boeing

By Chris Isidore, CNN

New York (CNN) — At 5 p.m. PT on January 5, 2024, Boeing seemed like a company on the upswing. It didn’t last. Minutes later, a near-tragedy set off a full year of problems.

As Alaska Airlines flight 1282 climbed to 16,000 feet in its departure from Portland, Oregon, a door plug blew out near the rear of the plane, leaving a gaping hole in the fuselage. Phones and clothing were ripped away from passengers and sent hurtling into the night sky. Oxygen masks dropped, and the rush of air twisted seats next to the hole toward the opening.

Fortunately, those were among the few empty seats on the flight, and the crew got the plane on the ground without any serious injuries. The incident could have been far worse — even a fatal crash.

Not much has gone right for Boeing ever since. The company has had one misstep after another, ranging from embarrassing to horrifying. And many of the problems are poised to extend into 2025 and perhaps beyond.

The problems were capped by another Boeing crash in South Korea that killed 179 people on December 29 in what was in the year’s worst aviation disaster. The cause of the crash of a 15-year old Boeing jet flown by Korean discount carrier Jeju Air is still under investigation, and it is quite possible that Boeing will not be found liable for anything that led to the tragedy.

But unlike the Jeju crash, most of the problems of the last 12 months have clearly been Boeing’s fault.

And 2024 was the sixth straight year of serious problems for the once proud, now embattled company, starting with the 20-month grounding of its best selling plane, the 737 Max, following two fatal crashes in late 2018 and early 2019, which killed 346 people.

Still the outlook for 2024 right before the Alaska Air incident had been somewhat promising. The company had just achieved the best sales month in its history in December 2023, capping its strongest sales year since 2018.

It was believed to be on the verge of getting Federal Aviation Administration approval for two new models, the 737 Max 7 and Max 10, with airline customers eager to take delivery. Approvals and deliveries of its next generation widebody, the 777X, were believed to be close behind. Its production rate had been climbing and there were hopes that it could be on the verge of returning to profitability for the first time since 2018.

Today it faces another difficult year ahead.

Lingering problems

Approval of those three models is still uncertain. Boeing has warned investors that losses are likely to continue through 2025. It is on the verge of having its credit rating downgraded to junk for the first time in its history, and it could end up being booted from the Dow Jones industrial average, where it has resided as one of the nation’s most significant companies since 1937.

Boeing’s (BA) stock plunged by about a third in 2024, after closing down more than 2% on Monday following the Korean crash. Its previous CEO and several other prominent executives were ousted. And its seemingly unending string of bad headlines raised serious questions about the company’s ability to get its safety and quality problems under control.

Soon after the Alaska Air incident, the National Transportation Safety Board’s preliminary investigation found that the plane had left a Boeing factory two months earlier missing the four bolts needed to hold the door plug in place.

The incident led to numerous federal investigations, not just by the NTSB but also by Congress, the Federal Aviation Administration and the Justice Department. The FBI notified those on the plane that they might be considered crime victims, and the FAA’s probe led to increased oversight of Boeing by the agency, including limits on how many of the planes it could produce.

Here’s a rundown of the other problems it experienced in the last year.

Pleading guilty

The Alaska Air incident reopened Boeing to new prosecution in a case it had agreed to settle three years earlier. In July, Boeing agreed to plead guilty to federal charges that it had deceived the FAA during the initial certification process for the 737 Max. Under the deal, it agreed to pay up to $487 million in fines, double what it originally paid under a 2021 deferred prosecution agreement.

The most serious consequence for Boeing was an agreement to operate under the oversight of a new government-appointed monitor.

But in October, a federal judge rejected the plea partly because of questions about how a government-appointed monitor would be selected, leaving the ultimate punishment still uncertain.

Stranded astronauts

In June, Boeing finally launched a crewed mission with its Starliner spacecraft, taking NASA astronauts Butch Wilmore and Suni Williams to the International Space Station.

The mission was long overdue, after years of development and test flight problems left it far behind rival SpaceX in carrying astronauts to the ISS.

But the success proved short-lived: Soon after the Starliner’s arrival, NASA disclosed that helium leaks and thruster outages meant it wasn’t safe for the spacecraft to return the two astronauts to Earth after eight days as originally planned.

The Starliner eventually returned to Earth without anyone aboard, and Wilmore and Williams are still waiting for a ride home on a SpaceX Dragon spacecraft sometime in early 2025. When Boeing’s Starliner will again be able carry astronauts and fulfill the company’s contract with NASA remains unknown.

Crippling strike

In September, 33,000 members of the International Association of Machinists started a strike that halted production of the 737 Max and the company’s freighter aircraft. Union members had voted nearly unanimously to reject a tentative agreement that had been reached between the company and union leadership about a week earlier.

Many union members were still angry over the loss of a traditional pension plan 10 years earlier, and they stayed on strike nearly two months. They rejected a subsequent offer before finally voting in favor of a third offer that gave them an immediate raise of 13% and raises of 9% for each of the next two years and then another 7% in the fourth and final year of the contract. Combined, that raised hourly pay by 43% over the life of the contract.

Beyond the cost of the new labor deal, the work stoppage was the most costly American strike of the 21st century, costing the company, its workers and its suppliers more than $11.5 billion, according to Anderson Economic Group, a Michigan research firm with expertise in estimating the cost of work stoppages. experts. And it took Boeing about a month to resume production once the strike ended.

During the strike, Boeing announced it would be forced to cut 10% of its global workforce of 171,000 employees in a cost-saving move to limit losses going forward.

Mounting losses

In October, Boeing announced one of its worst financial quarters in years, with its core operating loss surging to $6 billion in the third quarter.

It is poised to report its biggest annual loss since 2020, when it was dealing with both the Max grounding and the Covid-19 pandemic, which sparked massive losses across the global airline industry.

Quarterly losses resulted not just from the strike, which only affected the last two weeks of the period. The loss included a $3 billion pre-tax charge for further delays in the 777X program.

With the company not restarting production of the 737 Max or freighters until early December, the fourth quarter is certain to bring a new massive loss.

The company has lost $39.3 billion since early 2019 and has reported losses in virtually every quarter since then.

Jeju Air crash

Boeing’s year ended in tragedy. The Jeju Air plane’s landing gear appeared not to be extended as it attempted to land. There were also reports of a bird strike causing the plane’s pilots to issue a distress call as it upon approached the airport in Muan, South Korea.

The plane, a 737-800, has a very strong safety record, unlike its successor 737 Max model.

Data from Boeing shows that the 737-800 has had one of lowest rates of fatal accidents in the industry when compared to the number of flights flown.

A 15-year-old plane, like the one that crashed Sunday, is unlikely to have problems caused by a design flaw or production problems attributed to Boeing. But it is too soon to say why the Jeju Air plane crashed.

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