Top Boeing executive Greg Smith said Wednesday the jetmaker is in a holding pattern, waiting for the verdict from aviation regulators worldwide on its fix to the 737 MAX before it can move ahead with getting the plane back in service.
Separately, he raised the possibility that production of the second version of the forthcoming 777X may be delayed because of a lack of near-term demand.
Smith, chief financial officer and executive vice president for strategy, said Boeing has turned over to the regulators its software fix for the 737 MAX flight-control system, as well as recommendations for additional pilot training and is now answering detailed technical questions from all corners of the globe every day.
The fix should prevent the erroneous malfunction of the system that contributed to the fatal crashes of two MAX jets in Indonesia and Ethiopia, killing 346 people. The plane has been grounded worldwide for 12 weeks.
“We’ve completed the software and training and passed that over,” Smith said. “Now we’ve got regulators from around the world coming in with more questions before we go to the next milestone.”
“We’ve pulled out all the stops as far as what anyone needs in any part of the globe and being responsive,” he said.
His remarks make clear that Boeing is working to achieve at least a measure of consensus among safety regulators around the world before moving to have the MAX fly passengers again. And one reason for that, he said, is concern that the brands of both the 737 MAX and Boeing itself have been damaged and need careful repair.
Smith said Boeing is looking outside the company for image and reputation support, “hiring folks on the brand management side, or on crisis management, getting some experts in there to help us manage that.”
“We’re putting whatever resources are required, inside and outside the company, to help us restore the MAX brand and work on the company brand,” he said. “We need to bring the best and brightest to do that, to understand where we are globally with the brand and what do we need to do in the U.S. versus in China and by airline.”
Speaking at the UBS Global Industrials conference in New York, Smith said that even after the regulators give clearance to end the grounding of the MAX, the process of returning the fleet to service will be an enormous logistical challenge that will take weeks or months, depending on the needs of each airline.
He said Boeing teams are doing detailed planning for when that moment comes, negotiating with each airline and getting ready to deploy teams of technicians to take planes out of storage, install the software fix and provide the necessary pilot-training resources.
Meanwhile, Boeing is coordinating with its 737 suppliers, many of which are struggling to maintain a production rate to supply parts for 52 jets per month even though Boeing itself has cut back to rolling out 42 finished planes a month.
Separately, Smith also hinted at some issues with the new widebody 777X jet program in Everett. Two of the new airplanes with giant carbon composite wings already have rolled out of the factory, with two more in final assembly. The first flight is expected soon.
Smith said that GE has had “challenges” in producing the huge GE-9X engines for the airplane. “They are having to do some retesting,” he said.
The plane is still expected “to fly this year and enter service in 2020,” Smith said.
In addition, demand for the 777X, and, in particular for the smaller 777-8X version, has been soft and recent sales have been sparse.
Boeing will build the 777-9X first and was expected to deliver the -8X model perhaps a year later. Smith said Boeing is “looking at the timing and demand for the -8 to see if that still makes sense and do we want to push that out?”