US regulator says Boeing safety improvements vital for profitability
Adds more comments from senator, FAA administrator
By David Shepardson
WASHINGTON, Sept 25 (Reuters) -The head of the Federal Aviation Administration told a U.S. Senate panel on Wednesday that Boeing BA.N must address a series of safety issues before he will let them boost 737 MAX production, warning the issue could impact company profits.
FAA Administrator Mike Whitaker capped production at 38 MAX planes per month in January after a door panel missing four key bolts flew off an Alaska Airlines 737 MAX 9 midair in January.
"They cannot grow to where they need to grow without" making broad safety improvements in six key categories and maintaining those improvements at higher production rates, Whitaker said at a Senate Permanent Subcommittee on Investigation hearing on FAA's oversight of Boeing. "They don't do that, they don't grow, and if they don't grow, they're not going be able to achieve profitability."
Boeing shares fell 2.3%. The company did not immediately respond to a request for comment on the hearing.
Senator Richard Blumenthal, chair of the committee, noted that Boeing previously produced 52 planes per month in 2018 but production has slid below 38. He asked if lowering the cap would make it more effective.
"Boeing has put profits and speed of production ahead of quality and safety, and ultimately that failing is at the core of its current difficulty," Blumenthal said.
Reuters reported Sept. 10 that Boeing told suppliers it was delaying a key production milestone for its 737 MAX by six months, three industry sources said, a sign the planemaker was struggling to boost production of its best-selling jet.
"Boeing is quite aware that they're not going to increase production on any of these aircraft" until they show they are meeting six key metrics or being in the "green," Whitaker said.
Asked if a production cap applies to other Boeing airplanes like the 787, Whitaker told reporters it was a "fluid situation" but added: "If you had a robust safety management system, you wouldn't increase production unless you were in the green on everything. So that's our expectation across the fleet."
Boeing's latest 737 supplier master schedule communicated to the industry calls for MAX output to reach 42 a month in March 2025, compared with its previous target of this month.
Boeing has not changed its official plane production target, which calls for 38 MAX jets a month by the end of 2024, up from roughly 25 jets a month in July.
Reporting by David Shepardson; Editing by David Gregorio
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