The skies are growing dark for Boeing and its embattled CEO David Calhoun as the company prepares to release its fourth quarter earnings on Wednesday. The recent emergency landing of an Alaska Airlines 737 MAX 9, caused by a structural panel failure, has intensified scrutiny on Boeing’s manufacturing issues and leadership missteps.
Though flights have resumed on the MAX 9 after a three week grounding, the January 5th incident over Washington state is expected to burden Boeing’s finances for years. It marked the most serious operational failure since the twin crashes of Lion Air and Ethiopian Airlines MAX 8s in 2018 and 2019, which claimed 346 lives.
Beyond reporting another annual loss, Boeing may withdraw its production targets for commercial planes – once considered a cornerstone of its mid-term outlook. Promises of renewed profitability in 2025-2026 now seem doubtful.
The Alaska emergency, while not causing injuries, alarmed investigators at the National Transportation Safety Board (NTSB). Their ongoing probe into root causes is expected to provide an update next week. But the Federal Aviation Administration (FAA) has already blamed Boeing’s quality control as “unacceptable” in missing the defects.
Internal emails have since shown that Boeing engineers knew of potential safety risks with the MAX model but management pushed to accelerate production. The company still faces multiple investigations and lawsuits from the earlier crashes.
The renewed turmoil has sent Boeing shares down nearly 18% since the Alaska flight, as stricter oversight looms. Bank of America downgraded the stock this week, citing “materially increased regulatory scrutiny” leading to slowdowns.
Scrutiny is also rising on Calhoun and the Boeing leadership team, who spent part of last week defending the company in private meetings on Capitol Hill. Public hearings are planned to follow. “They need to demonstrate change,” said former FAA investigator Jeff Guzzetti, hinting that management shake-ups may be coming.
While Boeing is not expected to disclose full findings from the MAX 9 incident in its earnings report, analysts hope for details on operational changes planned. “They need to dig deeper into how disrupted their manufacturing has become,” said Morningstar analyst Nicolas Owens.
The FAA clearing the MAX 9 to fly came with a catch – production levels are frozen until improvements can be proven. This stalls Boeing’s plan to ramp up production from around 38 planes per month now to 50 in 2025/2026. That boost was counted on to generate $10 billion in free cash flow.
Wednesday’s earnings will provide the first clues on how Boeing leadership aims to steer the company through the revived crisis. But restoring confidence in the aviation giant will require overcoming financial, legal, and regulatory headwinds in the turbulent periods ahead. With the MAX failures threatening Boeing’s reputation, analysts say sweeping changes in corporate culture and oversight may be the only path to regaining trust.
