[Weekly Preview] Safety Incidents Ignite Boeing Crisis—Can China's Homegrown Passenger Jets Seize the Opportunity? (AI Translation)

【周刊提前读】安全事故引爆波音危机 国产大飞机能抓住机会吗？

Boeing, one of the world’s foremost aircraft manufacturers, faced an unprecedented credibility crisis in 2024, marked by multiple accidents, lack of cooperation in investigations, record falsification, and the threat of renewed criminal prosecution by the U.S. Department of Justice (DOJ) for allegedly violating a Deferred Prosecution Agreement (DPA) reached after two fatal 737 MAX crashes in 2018 and 2019 that killed 346 people. Investigations found the two crashes were caused by a design flaw in the MCAS anti-stall software, which Boeing was aware of but intentionally withheld from regulators. The DPA in 2021 required Boeing to pay more than $2.5 billion in penalties and cooperate in compliance reforms, yet further safety lapses occurred, including the January 2024 incident where an Alaska Airlines 737-9 MAX’s “door plug” blew out mid-flight. Fortunately, the plane landed with only minor injuries, but the incident intensified scrutiny, prompting calls to terminate the DPA and resume judicial proceedings against Boeing[para. 1-4].

Further compounding Boeing’s woes, in May 2024, the FAA launched new investigations into the 787 Dreamliner over alleged skipped inspections and falsified records, and issued directives concerning fire risks in 777 fuel tanks. Boeing's stock fell nearly 30% in 2024, its market capitalization and bond rating suffered, and customer confidence plummeted. Where once Boeing led the industry, its Q1 2024 financials showed revenues of $16.5 billion (down 8% year-on-year) and aircraft deliveries of 83 (down 36.1%), drastically lagging behind Airbus, which posted a 9% revenue increase to €12.8 billion and delivered 142 jets[para. 5-7]. Factors like pandemic-induced workforce attrition and supply chain disruption added to Boeing’s internal weaknesses, especially its eroded safety culture—a gap confirmed by regulatory and expert reviews[para. 8-9].

Boeing responded with a series of moves: boosting its Quality Management System, expanding quality inspector ranks by 20%, and partnering more closely with supplier Spirit AeroSystems to reduce defect rates. Despite these efforts, Boeing faces near-constant negative feedback, lawsuits from shareholders and passengers, and management upheavals, with CEO Dave Calhoun announcing his resignation by the end of 2024 amid calls for a return to an “engineering culture” focused on safety[para. 10-13].

Airlines globally, including Emirates and Ryanair, have complained about Boeing’s persistent production delays and quality lapses. European and Asian airlines have increased orders with Airbus, and in China—where Boeing’s position is threatened by both geopolitics and the emerging Chinese aircraft manufacturer COMAC—the last major jet order was in 2017, as state carriers shifted their purchases to Airbus[para. 14-17]. U.S. carriers relying heavily on Boeing, like Southwest, are constrained by high switching costs, but the pressure is growing as customers seek alternative suppliers[para. 18-19].

Boeing and Airbus together face a massive backlog, exceeding 14,000 commercial aircraft as of early 2024—years of demand that neither can fulfill quickly due to persistent supply chain bottlenecks. The result: rising aircraft leasing costs and delayed fleet renewals for airlines worldwide[para. 20-23].

A key challenger is China’s COMAC and its domestically produced C919 jet. C919's market share is forecasted to reach 20% in China within a decade, offering an alternative as both Airbus and Boeing struggle with deliveries. However, COMAC’s global competitiveness is limited by technical dependencies on Western suppliers and the lack of international certification for the C919. Meanwhile, Chinese airlines are increasingly placing orders for C919s, but annual output remains in single digits, with ambitions to reach 150 units per year by 2028[para. 24-27].

Boeing’s future hinges on deep safety reforms, effective crisis management, and regaining stakeholder trust in a market rapidly evolving due to both competition and persistent supply chain challenges[para. 28-29].