Business

AerCap says Boeing’s financial targets must ‘take back seat’ in focus on safety

Boss of world’s biggest aircraft leasing company warns that US plane maker cannot afford another mistake

AerCap chief executive Aengus Kelly: he said Boeing is a 'tremendous' company with 'tremendous' people, and it is premature to speculate on what went wrong. Photograph: Dara Mac Dónaill

Sylvia Pfeifer
Thu Jan 18 2024 - 13:57

Boeing cannot “afford another slip-up” with its 737 Max family of aircraft, and must set aside financial targets to focus solely on quality and safety, the Irish head of one of the world’s largest aircraft owners has warned. “Given what has happened with the two fatal crashes and this incident, the financial targets have to take a back seat for Boeing and its supply chain,” said Aengus Kelly, chief executive of the world’s biggest aircraft leasing company, Dublin-based AerCap.

In an interview with the Financial Times on Thursday, Mr Kelly said he backed Boeing and its management, but added: “Boeing must now focus 100 per cent on quality and safety metrics. Financial metrics are completely secondary to the future of the company at this point.”

His comments come as Boeing seeks to contain the fallout from a damaging fuselage breach on a 737 Max 9 aircraft operated by Alaska Airlines 12 days ago. The US Federal Aviation Administration (FAA) has grounded 171 of the Max 9 aircraft while investigations continue into what went wrong, but the incident has already raised questions over Boeing’s quality controls. It has also refocused scrutiny on the 737 Max, Boeing’s most popular plane, whose smaller model, the Max 8, was involved in two fatal crashes in 2018 and 2019.

Mr Kelly stressed that he thought Boeing was a “tremendous” company with “tremendous” people, and that it was premature to speculate on what went wrong. He also threw his weight behind the Max aircraft, adding that AerCap was continuing to buy it.

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However, he said of the Max aircraft: “That product is the backbone of Boeing so everything must be done in the near to medium term to ensure the quality of the product. [They] cannot afford another slip-up...If there were another issue with the product line it would be a very hard sell for customers to take incremental aircraft.”

Boeing declined to comment.

After the Max 8 crashes Boeing faced criticism that the US company’s shift in priorities from engineering to financial performance over the years had affected its focus on quality control and safety. The company has repeatedly stressed its commitment to safety over the years.

AerCap owns 53 Max aircraft, including a handful of Max 9s, all of which are on lease to airlines. It has ordered an additional 124 Maxes. The company owns more than 1,400 passenger aircraft across a range of Boeing and Airbus models.

Boeing’s customers have been watching closely to see whether the Alaska incident could have wider repercussions for the Max family of jets. Michael O’Leary, chief executive of Ryanair and one of the biggest buyers of the aircraft, said on Tuesday that the airline has doubled the number of its engineers overseeing Boeing’s production lines.

Boeing has since announced it will open its factories to airline customers, and on Tuesday named Kirkland H Donald, a retired US navy admiral, to lead a third-party review of its quality management systems.

The FAA on Wednesday said inspections of an initial group of 40 of the 171 ground Max 9 aeroplanes had been completed. The agency had said last Friday that 40 needed to be reinspected and that it would then review the results before determining if it was safe to allow the Max 9s to resume flying. – Copyright The Financial Times

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