By Dominic Gates / The Seattle Times
PARIS — One of Boeing’s biggest 737 Max customers sharply criticized the company’s handling of the crisis resulting from two recent crashes, and raised the stark question of whether Boeing Chairman and Chief Executive Dennis Muilenburg will be forced out as a result.
In an interview at the Paris Air Show, Avolon Chief Executive Dómhnal Slattery, who runs the third-largest airplane leasing company in the world, said the additional bad news in Paris on Monday of a delay to the 777X program will only feed “the swirling debate: whether Muilenburg will survive all of this.”
“I think he has the support of the Boeing board,” Slattery said. “But our view here is that Boeing have failed to win the media communications battle. They are forgetting about the most important constituency, which is the hundreds of millions of potential passengers.”
He said the refusal of Boeing to fully and publicly accept its share of the blame, an approach that has produced awkward moments with Muilenburg seemingly bound by legal restrictions from being too plain-spoken, has damaged Boeing’s reputation, especially overseas.
“You can understand that as a legal strategy,” Slattery said. “But if you play that out to its Black Swan scenario, there’s a scenario that says the aircraft program gets canceled.”
“What if the airplane gets back into the air and no one wants to fly it for 12 or 24 months?” he asked. “Every airline in the world will want to cancel or defer.”
Chinese-owned but based in Dublin, Avolon owns or manages more than 550 airplanes and has ordered just shy of 400 more from Airbus and Boeing. It owns nine 737 Maxs, currently grounded, and has 132 more on order.
As a customer with a big stake in how the Max grounding plays out, Slattery is clearly very unhappy with Boeing’s crisis management.
He said that in decades past, the traveling public over time generally moved on and forgot about plane crashes, though air disasters were more common events then. Now, he said, “it’s a very different world, with the transparency and flow and speed of information and flight booking engines that allow you to select the aircraft type.”
“It’s a very real issue, country by country,” Slattery said, reflecting what he’s hearing from airline clients. “Take Indonesia. The regular passenger in Indonesia thinks this crash [of Lion Air Flight 610 that killed 189 people] should never have happened, that it wasn’t Lion Air’s fault, it was the aircraft’s fault.”
“They have 200 million people,” he said. “Winning the hearts and minds of Joe Public is the biggest challenge Boeing have, on the assumption they get the aircraft signed off by the regulators.”
Slattery, who is especially well connected in the Asian market, believes that the sign-off from regulators in that crucial market could be drawn out even though the Federal Aviation Administration and its European counterpart EASA are likely to clear the Max to fly this summer.
“My gut says the Western world will let it back in the air in July or August. But our view is that the Chinese will play this to the long game and the Indonesians will absolutely wait until the end,” he said. “You could have the plane regulated to fly in America and Europe, but nowhere else in the world that matters.”
“All of this will continue to compound the pressure on Muilenburg,” he said.
Regarding the 777X’s delayed first flight, Slattery said airlines around the world are experiencing profound frustration at the failure of both Boeing and Airbus “to deliver on basic expectations.”
And as Boeing struggles with the aftermath of the air crashes, plus a delay on its big new jet program, it has had to shelve the decision on whether to go forward with an all-new airplane, the New Mid-market Airplane, or NMA.
“Nine months ago, I would have expected the NMA to be launched here” at the 2019 Paris Air Show, he said.
Instead, on Monday at the Air Show, Boeing Commercial Airplane Chief Kevin McAllister offered “thoughts and prayers” to the families of the 346 people killed in the crashes and assurances that he’s working to make sure similar accidents will never happen again.
Meanwhile, in the Airbus chalet at the other end of the Le Bourget airfield, Boeing’s rival moved ahead as expected and launched a longer-range version of its big single-aisle jet called the A321neoXLR (for extra long range), which will steal at least a bit of the lower end of the NMA target market.
Slattery said that with Airbus also expected next year to launch a higher-weight version of its A330neo at the top end of the NMA market, Boeing may have to launch the NMA to have some kind of answer. But it’s unpredictable, he said, because there are many variables.
“Does Muilenburg stay in the job? If not, does a new CEO launch a new airplane within his first year? That’s never happened at Boeing,” he said. “If the Max is held up for six to nine months, can the board credibly launch a new airplane?”
“It’s really difficult,” Slattery said, expressing some indirect sympathy for Boeing. “It’s the most complex time for Seattle in my 30 years in the business.”
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