Boeing CEO admits 'mistake' with 737 Max ahead of Paris Air Show, as analysts note 'ominous dark cloud' hanging over the entire industry

FILE PHOTO: An aerial photo shows Boeing 737 MAX airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson

  • Boeing CEO Dennis Muilenberg admitted his firm made mistakes
    that were “not acceptable” in handling a safety feature that’s been
    implicated in two deadly crashes of the company’s signature 737 Max
    aircraft. 
  • Ahead of the aircraft industry’s premier event, Boeing is
    promising more transparency as it works to get its best-selling
    plane back up in the air. 
  • But Boeing’s problems may be dwarfed by a broader economic
    storm that
    many analysts believe is threatening a slowdown
    in the $150
    billion commercial aircraft industry. 
  • Amid safety concerns and trade tensions, analysts say aircraft
    sales figures could be the lowest in years and industry demand
    looks “genuinely scary.”
  • Read more stories
    like this on Business Insider.

Boeing is in full-on damage-control mode as the aerospace
industry faces a rash of concerns that threaten to send it into a
slump.

Ahead of the Paris Airshow this week, one of the aircraft
industry’s most important events, Boeing CEO Dennis Muilenburg

told reporters
his company made a “mistake” in how it handled
the cockpit safety feature that’s been implicated in two deadly
crashes of the company’s signature 737 Max aircraft. 

The company has drawn widespread condemnation for not alerting
pilots and regulators that a safety indicator in the planes didn’t
work, which has been faulted for contributing to the crashes in
Indonesia and Ethiopia that killed nearly 350 people. 

Boeing’s 737 Max has been grounded for months as the company
reckons with the fallout, and Muilenberg slammed his firm’s
communication as “not acceptable” and promised more transparency as
they try to get their best-selling plane back up in the air. 

Regulators say the aircraft isn’t expected to be in operation
again
until the end of the year
, far longer than initially
anticipated. 

But Boeing isn’t the only one reckoning with headwinds ahead of
the industry’s biggest event of the year. Delta CEO Ed Bastian said
last week
the entire airline industry is still “traumatized”
by the 737
Max fiasco, which has sent them scrambling to cope with grounded
planes and tarnished public confidence.

And Boeing’s problems may be dwarfed by a broader economic storm
that
many analysts believe is threatening a slowdown
in the $150
billion commercial aircraft industry. 

“Boeing’s MAX crisis isn’t the most ominous dark cloud, since it
can be solved, but traffic numbers are genuinely scary,” said Teal
Group aerospace analyst Richard Aboulafia
told Reuters
. “If March and April are a sign of things to come,
we’re looking at broader industry demand and capacity
problems.”

Amid trade tensions and safety concerns, the multi-year streak
of surging airline orders could be stopped short. 

Last year, the Farnborough Airshow resulted in more than 950
aircraft orders and commitments. Some analysts are expecting only
800 at the event in Paris, while others project the total at a far
gloomier 400. 

“Net orders might be the lowest in years,” Aboulafia said.

US President Donald Trump is expected to meet with Chinese
President Xi Jinping at the G20 summit later this month, where
their high-profile tariff battle could reach a denouement or
escalate further, shaking an array of global industries and

dampening investor sentiment
.

Other analysts had a more upbeat outlook, noting that booming
Asian economies and the forthcoming releases of more fuel-efficient
planes could help buoy the industry. 

“We’re talking to so many airlines who still want more aircraft,
and there’s really been no lessening of those discussions,” John
Plueger, CEO of Air Lease Corp, told Reuters.


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Boeing CEO admits 'mistake' with 737 Max ahead of Paris Air Show, as analysts note 'ominous dark cloud' hanging over the entire industry