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A year ago, Boeing executives were trying to convince Wall Street investors they could ramp up production of their bestselling 737 Max plane to record levels as demand surged.
“The Max production ramp-up continues,” Chairman and CEO Dennis Muilenburg explained on an Oct. 24, 2018, conference call. There was tremendous “upward market pressure” on the manufacturer’s 737 production rate, meaning Boeing was having trouble keeping up with orders for the company’s hottest-selling plane (which was sold out until the mid-2020s). Muilenburg assured analysts on that earnings call that the company would be churning out more planes next year.
Five days after the call, one of the jets flown by Lion Air with 189 passengers and crew crashed outside of Jakarta, Indonesia, minutes after take off, followed by another in Ethiopia with 157 aboard less than five months later. There were no survivors.
Now Boeing’s management is struggling to convince Wall Street — and Washington — that the plane is safe enough to fly.
The crashes plunged Boeing into one of the company’s biggest crises in its more than 100-year history, drawing scrutiny of Boeing’s moneymaker aircraft.
On Tuesday, Boeing said it replaced the head of its commercial airplane unit, which makes the 737 Max. Kevin McAllister is the senior-most executive to leave amid the crisis.
- United Airlines Holdings Inc said on Friday it is extending cancellations of Boeing 737 MAX flights until March 4, joining U.S. peers who are also scheduling without the aircraft until early March as the jet awaits approval to fly again.
The March date will mark nearly a year since regulators around the world issued a safety ban on Boeing Co's fastest-selling aircraft, the 737 MAX, following two fatal crashes in Indonesia and Ethiopia.
Boeing said on Monday that the U.S. Federal Aviation Administration could approve in December fixes to software that played a role in both crashes and approve fixes to new pilot training in January, though the agency has insisted it has no set time frame.
Major airlines have said they will need at least a month after approval to complete training and install revised software before flights can resume.
Since the grounding, airlines have canceled flights or put other aircraft on routes that would have been flown with the 737 MAX in a hit to profits.