By Skies Magazine | December 24, 2019 Estimated reading time 3 minutes, 50 seconds.
It’s been a very tough year for The Boeing Company.
Amidst the ongoing efforts to return the 737 Max to service and the negative press of the past year, the company announced on Dec. 23 that it was closing off 2019 with a leadership shakeup.
Beleaguered CEO and board director Dennis Muilenburg, the public face of the company throughout the ongoing Boeing 737 Max scandal, has stepped down effective immediately.
He is being replaced by current chairman, David L. Calhoun, who will assume the role of CEO and president effective Jan. 13, 2020. In the interim, Boeing’s chief financial officer Greg Smith will serve as temporary CEO.
“The board of directors decided that a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders,” said a Boeing press release.
Muilenburg has been criticized over his handling of the 737 Max situation. The aircraft has been grounded worldwide since March 2019, following the second of two crashes that killed a total of 346 people.
Boeing had said it was aiming to have the Max returned to service in December 2019 – an assertion the administrator of the Federal Aviation Administration, Steve Dickson, rebuked. On Dec. 11, Dickson said the plane would not fly before 2020 and noted there were numerous milestones to reach before the Max could be deemed airworthy.
“We don’t think it is controversial to suggest that Boeing’s Max response has been a failure — and as a result we think it is wholly appropriate for the board to replace Muilenburg as the CEO of the company,” said a research note from analyst Robert Stallard of Vertical Research Partners.
Moving forward, the Chicago-based OEM noted that it “will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers.”
American Airlines said on Dec. 12 that it has removed the Max from its flight schedules through to April 7. Southwest Airlines won’t be booking any flights on the Max until at least April 13. Air Canada has removed the aircraft from its lineup through to Feb. 14, and said it would continue to update plans as required. WestJet and Sunwing Airlines have also been affected in Canada.
Meanwhile, Boeing announced in mid-December that it plans to temporarily halt production of the 737 Max in January.
Production of the jet has continued during the grounding, and there are now about 400 Max jets in storage pending delivery to customers. Halting production will have a domino effect on not only Boeing, but also its manufacturers and airline customers, who have based expansion plans on the best-selling aircraft.
It’s estimated the Max grounding has already cost Boeing about US$9 billion.
