The acting head of Europe’s aviation regulator said on Wednesday the agency would halt its indirect approval of Boeing’s (BA.N)
jet production if warranted, but he feels reassured that the planemaker is tackling its latest safety crisis.
In an interview with Reuters, the European Union Aviation Safety Agency's acting executive director, Luc Tytgat, gave the first public indication that international cooperation underpinning global airplane production was being tested by the ongoing crisis as it rarely has been.
Asked if EASA would be prepared to stop recognising U.S. production safety approvals declaring that Boeing jets are built safely, Tytgat said, "If need be, yes".
Boeing has been under mounting pressure over factory quality control since Jan. 5, when a door plug tore off a 737 MAX 9 jet in mid-air in an incident blamed on missing bolts.
The U.S. Federal Aviation Administration said last week an audit of Boeing and supplier Spirit AeroSystems (SPR.N) and found multiple instances of poor controls.
Under a transatlantic pact, the FAA and EASA regulate the factories of their respective plane makers - Boeing and Airbus (AIR.PA) - and recognize each other's safety approvals.
However, if one side loses confidence in the other's compliance checks, it can call for consultations and, if those fail, suspend recognition after a pause of 30 days.
Such steps are rare.
"All the tools must be implementable as soon as we see the justification or situation that requires us to take appropriate measures," Tytgat said, adding that no such action was imminent.
EASA's influence over the design of Boeing planes has grown following the MAX crashes, but it has relatively few ways to increase its monitoring of the production of existing Boeing models other than the drastic option of suspending recognition.
Pressed on what would push EAA to go that far, Tytgat said, speaking only for himself, "More fatal accidents in the future".
The FAA did not comment directly on the EASA remarks but a spokesperson reiterated the agency's earlier statements that Boeing must commit to “real and profound improvements”.
Boeing did not comment.
'REASSURED' AFTER BOEING MEETING
But Tytgat did not see any immediate threat to Boeing's production certification.
"We don't see why (it) cannot be maintained today. It is more (about) the oversight and monitoring conditions that are in place."
Tytgat said he held a discussion with senior Boeing executives on Friday that was reassuring.
"I have seen a change in the management. They put a lot of weight on quality controls, product quality and I was really reassured about the willingness of the top management to change .... production quality control," he said.
EASA officials visited Boeing's 737 plant last week, he said. But Tytgat ruled out a permanent presence, saying it would "not be in the spirit" of the transatlantic safety agreement.
FAA Administrator Mike Whitaker said on Monday that the agency would take action if it saw a reason to halt Boeing production.
A decision by either of the world's two most powerful aviation regulators to upend production approval of Boeing or Airbus jets would take the safety crisis into uncharted territory and likely stir political reactions, experts said.
Airline executives are frustrated with Boeing (BA.N) as its safety crisis has upended their business plans. But in a tight market for large aircraft supplied by two companies, they have little choice but to do business with the U.S. planemaker.
Despite some public displays of alarm - United Airlines (UAL.O) CEO Scott Kirby flew to France to talk with Airbus (AIR.PA) as Boeing's latest crisis erupted - carriers are still negotiating new plane orders, looking to leverage Boeing's delays to secure better terms.
Boeing's delivery schedule faces extended delays following a Jan. 5 mid-flight cabin blowout that exposed problems with safety and quality control in its manufacturing processes. But rival Airbus (AIR.PA) already has a backlog of orders that makes shifting over a non-starter.
Instead, airlines are adopting a variety of strategies to try to stay in the game with Boeing, using orders of one type of plane as a placeholder to possibly take deliveries of a different model. They also are negotiating harder, looking to use production delays to get discounts from the planemaker on new orders and compensation for financial losses.
"Boeing customers don't have much option but to stick with Boeing whether they like it or not," said Scott Hamilton, managing director at aviation consulting firm Leeham Company.
Kirby has been among the most vocal in expressing frustrations with Boeing. He met with Airbus after regulators grounded all of United's Boeing 737 MAX 9 fleet and put a big question mark over certification of the larger variant MAX 10, which was due for deliveries this year and was to be the cornerstone of United's fleet.
United has ordered 277 MAX 10 jets with options for another 200, but the tumult at Boeing moved the company to look at Airbus' A321neo jets as an alternative. Those talks raised the specter of Boeing losing one of its most loyal customers.
However, Airbus' order book is full through 2030. On Tuesday, Kirby said United wants A321 jets but is not willing to overpay for them.
Now, there is growing realization inside United that the carrier won't be able to find one solution to its MAX 10 problem, a person familiar with the matter said.
Instead, United is looking to use the delayed Boeing order to extract better deals for other planes, the person said. United has asked Boeing to start building MAX 9s for delivery and plans to convert those orders into MAX 10s once that aircraft is certified, Kirby said.
Several weeks ago, American Airlines (AAL.O) CEO Robert Isom blasted Boeing for its persistent quality issues, asking the jet manufacturer to get its act together. Last week, it placed its first-ever order for MAX 10 jets to secure an alternative to its Airbus A321 planes.
The Texas-based carrier has had to deal with Boeing's delivery delays, including for the 787 Dreamliner, which not only hampered its efforts to capitalize on the post-pandemic travel rebound but also drove up its costs.
In return for a vote of confidence for the troubled MAX 10 program, Chief Financial Officer Devon May said American had negotiated options to convert those orders into MAX 8s or MAX 9s. Its supply contract also provides financial compensation from Boeing for delivery delays.
For airlines like Southwest (LUV.N), one of Boeing's primary customers, transitioning away from Boeing is tantamount to changing their business model. It would entail heavy investments in maintenance, training, and technologies.
Airbus has long tried to woo Southwest with its smaller A220 as a substitute for Boeing's delayed MAX 7. But CEO Bob Jordan said the cost of operating multiple fleets is "significant."
"A strong Boeing is great for Southwest Airlines," Jordan said at JP Morgan's industrial conference on Tuesday. "It's great for our industry."
**Boeing's Security Camera Footage Overwrite on Alaska Airlines 737-9 Plane Repair**
#### The Situation:
- Boeing reportedly overwrote security camera footage of repair work on the door plug of an Alaska Airlines 737-9 plane, which failed during a flight in January.
- The National Transportation Safety Board (NTSB) informed the Senate Committee on Commerce, Science, and Transportation that the missing footage is obstructing its investigation into the accident.
- The NTSB highlighted the challenge of identifying the personnel responsible for the work performed on the accident aircraft, emphasizing the necessity to learn about Boeing's quality assurance process.
- The door crew manager at the Renton, Washington facility, where the repair took place, is currently unavailable for interview due to medical leave.
#### Airline Incident Recap:
- In January, Alaska Airlines Flight 1282 experienced a fuselage incident, prompting a safe return to Portland International Airport shortly after takeoff. The cause of the problem remains unclear.
#### Official Statements:
- Boeing affirmed its commitment to transparently and proactively supporting the investigation, emphasizing compliance with investigative information release rules amid intense stakeholder interest.
- Regarding the overwritten footage, Boeing stated that video recordings are typically maintained on a rolling 30-day basis.
- The preliminary report by the NTSB indicated that the plane was at the Renton facility in September and was delivered to Alaska Airlines in October.
#### Aviation Industry Updates:
- A Federal Aviation Administration audit of Boeing's 737 Max jet production line highlighted various issues in the production process.
- Boeing's challenges are affecting carriers like Southwest Airlines, leading to a reduction in Southwest's 2024 capacity growth projection due to the impact of Boeing's woes.