Boeing's brutal 2024 keeps getting worse

This wasn’t supposed to be how 2024 started for Boeing. It was supposed to be Boeing’s year, when it finally put its last 737 Max crisis behind it and CEO Dave Calhoun would be able to chart a path toward smoother skies. But then an ill-fated Alaska Airlines flight threw Boeing’s whole year into chaos. By late March, Calhoun was out.

Now, less than halfway through 2024, it’s been a year defined by production delays, regulatory scrutiny and investigations, multiple whistleblowers — and a historic losing streak for the stock.

Boeing stock is down about 29% so far in 2024, making it one of the worst-performing stocks in the S&P 500. The company is borrowing $10 billion as it burns through cash trying to fix its problems. And ratings agency Fitch says the company’s default risk is inching closer to junk bond territory.

Here’s a look at Boeing’s brutal 2024 — so far.

The Alaska Airlines door plug blowout

On Jan. 5, Alaska Airlines Flight 1282 lost a door plug — a part designed to replace an unneeded emergency exit door — during a flight from Portland International Airport to Ontario, California. The incident took place just 10 minutes after takeoff. The plane landed safely, but not before all the air rushing into the night sky took with it a teddy bear, two cellphones, a seat headrest, and a 15-year-old passenger’s t-shirt.

The Boeing investigations

Federal government regulators quickly sprung into action, even managing to find the missing door plug a couple days later in the backyard of a Portland schoolteacher. What investigators then found while poking and prodding the company was troubling.

An initial report from the National Transportation Safety Board released Feb. 6 said that somewhere between a Boeing facility and the Alaska Airlines flight, crucial bolts went missing on the plane in question. A Feb. 26 report from the Federal Aviation Administration suggested that the company “did not provide objective evidence of a foundational commitment to safety that matched Boeing’s descriptions of that objective.”

And the Justice Department reportedly began a criminal inquiry in early March. The FBI later informed Alaska Airlines passengers that they may have been victims of a crime.

The Boeing production delays

Boeing had already spent a few years been getting criticized by airline CEOs for production delays that were keeping their companies behind schedule on fleet rejuvenation and expansion. But with more scrutiny on its operations — the FAA said on Feb. 6 that it would put more “boots on the ground” at Boeing facilities — the company now doesn’t know quickly it will be able to build the planes its customers are waiting for for. At a New York conference in March, several airline CEOs used diplomatic language express their discontent with Boeing.

The Boeing lawsuits

In mid-January, 22 passengers who were aboard the the Alaska Airlines flight filed a class-action lawsuit. On March 4, three more of them put a price tag on the difficulty of their ordeal, filing a separate suit pursuing punitive damages that could cost Boeing and Alaska Airlines $1 billion.

“The main difference in the cases is that I am seeking a large amount of punitive damages, and those are not available in Washington,” said Jonathan Johnson, a lawyer representing the plaintiffs in the second lawsuit.

The competition from Airbus

Boeing’s main competitor in the commercial airliner space is France’s Airbus, which has made no secret of its desire to take advantage of its American rival’s troubles. In mid-March,United Airlines reportedly moved to lease a few dozen 737 Max replacements from Airbus.

“We are in the market,” for Airbus’ 737 Max rival, United CEO Scott Kirby said. “And if we get a deal that the economics work, then we’ll do something.”

The union negotiations

In mid-March, Boeing opened negotiations with the International Association of Machinists and Aerospace Workers District 751, the union representing 32,000 of its workers in Washington state. The last full contract negotiation was in 2008, and a number of extensions have kept it in place since. Workers went on strike for eight weeks before an agreement was reached.

Some analysts have tied Boeing’s recent issues to its employees being underpaid and overworked. The union is seeking a 40% raise for workers over the next three years, alongside overtime rule other benefit changes. The Financial Times reports that the union is also seeking a seat on Boeing’s board.

“We have to save this company from itself,” district president Jon Holden told the newspaper.

Dave Calhoun calls it quits — and he’s not alone

On March 25, Boeing announced that CEO Dave Calhoun would step down by the end of the year. Also departing are Stan Deal, who leads the company’s commercial airplanes division, and Larry Kellner, the chairman of Boeing’s board of directors.

“As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing,” Calhoun wrote in a letter to staff. “We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company.”

The payouts

In April, Alaska Airlines announced that Boeing would pay it $160 million as compensation for the profit hit it took due to the door plug blowout and the plane groundings that followed.

“As a result of the Flight 1282 accident and the Boeing 737-9 MAX grounding, we lost approximately $160 million in Q1 pretax profit, primarily comprising lost revenues, costs due to irregular operations, and costs to restore our fleet to operating service,” Alaska Airlines said in a filing. “We have received initial compensation from Boeing to address the financial damages incurred as a result of Flight 1282 and the 737-9 MAX groundings.” The company also said that it would be getting more money from Boeing, though it did not disclose how much and under what terms.

United also announced a similar deal that month, though the terms were not disclosed.

Disappointing deliveries

Boeing delivered the fewest planes in almost three years last quarter. The company said only 83 of its jetliners made their way to customers from January through March — the lowest number since 2021, when production was still recovering from a pandemic-induced slowdown.

In October, Boeing told investors that it would be able to bump 737 Max output from the current 38 planes a month to 50 by about 2025. After the Alaska Airlines incident, though, Boeing abandoned its fiscal guidance for the year and affirmed its then-current rate of production. But at its now-current rate of production, it’s getting just 27 planes a month out the door.

The whistleblowers

Boeing has dealt with a number of whistleblowers coming forward to raise warnings about the company’s quality control and safety procedures. The most prominent of them, Sam Salehpour, testified before the Senate that that alleged defects with the fuselages for the 787 Dreamliner and 777 planes could lead to the planes breaking apart in mid-air. Boeing has stood by the quality of its planes. He also said that Boeing had a pattern of retaliating against whistleblowers, an accusation the company denied.

Starliner’s continued setbacks

Boeing’s CST-100 Starliner spacecraft, first announced in 2010 and nearly a decade behind schedule to be operational by 2015, was supposed to have its first manned test flight May 6. But an issue with the pressure regulation valve on the vessel’s liquid oxygen tank delayed the launch again, depriving Boeing of a much-needed PR win.

Another FAA investigation

The FAA said in May that it opened a new probe into the new Boeing plane, the 787 Dreamliner that so concerned Sam Salehpour. Its investigation concerns whether Boeing employees may have falsified the plane’s safety inspection records.

“The FAA has opened an investigation into Boeing after the company voluntarily informed us in April that it may not have completed required inspections to confirm adequate bonding and grounding where the wings join the fuselage on certain 787 Dreamliner airplanes,” the agency said. “The FAA is investigating whether Boeing completed the inspections and whether company employees may have falsified aircraft records. As the investigation continues, the FAA will take any necessary action — as always — to ensure the safety of the flying public.”