Boeing aircraft sales plummet!
According to the latest data disclosed by Boeing, the company only sold 14 new aircraft in June, a year-on-year drop of 95%, compared to 304 aircraft sold in the same period last year. In the first half of this year, Boeing's total orders were 156 aircraft, a 70% decrease from the same period last year. On Tuesday, most US aviation stocks rose, while Boeing fell 1.4% and its market value shrank to $112.5 billion. Since its peak in mid December last year, Boeing's stock price has fallen by over 31%.
On July 8th local time, a Boeing aircraft malfunctioned again. After taking off from Los Angeles International Airport, a United Airlines Boeing 757 aircraft had a tire detached from the plane. In addition, the Federal Aviation Administration of the United States stated on the same day that due to the possibility of passenger oxygen masks malfunctioning in emergency situations, the agency requested inspections of 2600 Boeing 737 aircraft.
The day before, Boeing accepted a plea agreement from the US Department of Justice, admitting to conspiring to defraud the Federal Aviation Administration in two 737 MAX air crashes, and agreed to pay a fine of $243.6 million. Renowned investment bank Morgan Stanley has stated that investors in Boeing may feel reassured after admitting guilt as planned. The bank stated that Boeing's financial impact after pleading guilty to the US Department of Justice met expectations.
Sales plummeted
Since the Alaska Airlines Boeing cockpit door detachment incident, Boeing accidents have been frequent, leading to a sharp decline in sales.
On Tuesday local time, Boeing announced that it had only sold 14 new aircraft in the past month, most of which were cargo planes. Specifically, Boeing sold 11 777 cargo planes in June, with only 3 737 Max passenger planes sold, of which 2 were sold to an unidentified customer, and 1 was sold to Alaska Airlines as a replacement for the malfunctioning aircraft in January of this year.
The sales of 14 aircraft in June increased compared to only 4 and 7 in May and April, but decreased by 95% compared to the total order of 304 aircraft in June 2023. In addition, data shows that in the first half of this year, Boeing's total orders were 156 aircraft, a 70% decrease from the same period last year.
The only month in Boeing's report with strong sales was March, when 113 planes were sold, most of which came from orders for 85 planes from American airlines. However, the order was for an extended version of the 737 Max, and the Federal Aviation Administration (FAA) has not even approved the aircraft to carry passengers. The certification was originally scheduled to take place this year, but due to ongoing issues exposed by Boeing, it has been postponed to at least 2025.
In terms of delivery, due to legal and production challenges, Boeing delivered a total of 44 aircraft in June, a year-on-year decrease of 27%, but still the most delivered month of the year. Boeing has delivered 175 aircraft so far this year, far behind its European competitor Airbus, which delivered 323 aircraft in the first half of the year.
Frequent accidents
Since the beginning of this year, Boeing has been plagued by numerous accidents, leading to a serious crisis. A series of events have exposed quality and safety vulnerabilities in Boeing aircraft, leading to the departure of its chairman, CEO, and business department head, which has led to criticism from US regulatory agencies, the aviation industry, and public opinion.
Recently, Boeing aircraft experienced another malfunction. United Airlines confirmed that on the morning of July 8th local time, a Boeing 757 aircraft took off from Los Angeles International Airport when one of its tires fell off. United Airlines stated that the plane continued to fly to Denver International Airport after the tire fell off and has landed, with no injuries to ground personnel or onboard personnel.
United Airlines stated in a statement that the aircraft tires have been found and an investigation is ongoing. It is reported that there were 174 passengers and 7 crew members on the involved flight.
This is the second time in nearly 4 months that a United Airlines Boeing aircraft has experienced a tire detachment accident. In March of this year, a Boeing 777-200 aircraft flying to Osaka, Japan by United Airlines experienced a tire detachment accident while taking off from San Francisco, USA. Several cars in the airport staff parking lot were smashed.
In addition to tire issues, there is also an issue with oxygen masks. On July 8th local time, the Federal Aviation Administration of the United States ordered an inspection of 2600 Boeing 737 series aircraft, stating that passengers' oxygen masks may malfunction in emergency situations.
The Federal Aviation Administration of the United States has requested inspections of Boeing 737 MAX and 737 New Generation (737NG) aircraft after receiving reports of multiple displacement of passenger service component oxygen generators. It is reported that this issue may result in the aircraft being unable to provide supplementary oxygen to passengers during the decompression process.
Boeing pleads guilty
According to CCTV News, on July 7th local time, a document submitted by the US Department of Justice to the Federal Court of Texas showed that Boeing had accepted a plea agreement previously filed by the Department of Justice, admitting to conspiring to defraud the Federal Aviation Administration in two 737 MAX air crashes.
Boeing spokesperson also confirmed on the same day that the company has reached a principle agreement with the Department of Justice on the resolution clause.
According to court documents, the Ministry of Justice will require an independent supervisory agency to oversee Boeing's safety and compliance actions for the next three years and submit an annual report to the court. Boeing promises not to violate any laws during a three-year supervision period, agrees to pay an additional $243.6 million in fines, and invests at least $455 million in the next three years to strengthen its safety and compliance programs.
However, the plea agreement still needs to be approved by the court. The families of some of the victims of the two air disasters have expressed opposition to the plea agreement through lawyers, believing that the punishment for Boeing is too light.
In October 2018 and March 2019, there were air crashes on flights of Lion Air Indonesia and Ethiopian Airlines, resulting in a total of 346 fatalities. The crashed planes were both 737 MAX 8 passenger planes.
In January 2021, the US Department of Justice filed a criminal lawsuit against Boeing, and the two parties reached an agreement to extend the prosecution. Boeing agrees to pay fines and compensation exceeding $2.5 billion and promises to fully cooperate with government requirements to implement compliance and improvement plans. The deferred prosecution agreement will expire on January 7th this year. Boeing needs to prove to the US Department of Justice that it has complied with the terms of the agreement, and the Department of Justice will make an assessment to determine whether it is exempt from prosecution. If Boeing commits any federal felony or fails to fully comply with the terms of the agreement during this period, the US Department of Justice has the right to decide to proceed with the relevant litigation.