One of the things that constantly frustrates me about the United States is its business obsession with quarterly figures. These are in fact mandated in law, but they are a figure that has become so defining, even the largest of businesses simply cannot plan long term when their eyes are only on the next 90 days.
It was this obsession and the effect it has on the stock market price, coupled to a definition that board members would be paid based on the share values of the company, that led to the MAX catastrophe. Cost and value were everything, over and above all other considerations.
That demand also affected the speed of production at the 787 plants, especially it seems at Charleston, where streams of quality issues and poor workmanship to get production numbers high and money coming in (and share prices inflated further), led to complaints and quality issues. So much so that Qatar refused to accept any deliveries from Charleston ever again, so poor were the deliveries from that site.
Now, a year after new managers stepped in, the legacy of that time is coming home to roost.
Boeing is forecast, through 2021, to have to spend no less than $7.5 billion on problems relating to the 787 alone.
The aircraft has multiple problems with the way air frames were assembled in the rear sections of some 787-9’s and a growing number of 787-10’s. These are down to the method of joining the sections, and the strength of the fasteners that join the sections together. Repairs to existing air frames are said to be hideously expensive, largely because these are supposedly lifetime parts that would never see the light of day again until the aircraft was dismantled, maybe in thirty or so years.
For the most part, I’m told it requires stripping the interior section, and the exterior, requiring repainting, reassembly of internal parts and a physical adjustment that while very small in and off itself, is not simple to achieve in practice and is highly labour intensive and time consuming.
Various other issues, mostly to do with quality and warranty claims from airlines, extend to the entire fleet. I have been shown in person, back in 2019, the inside of a 787-9 that was just 7 months old. The lavatories were coming away from the walls, the sinks separating from their stands, faulty electrics to seats, badly installed IFE, catering areas that were simply unreliable and fittings for them again, physically moving against walls.
I was also told of water leaks, toilet blockages caused by grey and black water plumbing, and frequent loss of potable water supplies because of pipe failures or blockages.
Never mind allegations across the board that wiring cuttings and rubble, even tools were left inside closed spaces during assembly. There is plenty of evidence this is likely, as the USAF KC46 Tanker programme, based on the 767 was rife with quality issues, many of them down to tools and detritus left in fuel tanks, structural voids and so on, all in the past two years.
In the past few days, just another example of the problems that have potential to re-emerge and frighten prospective MAX operators, on its flight from Boeing to go back into service, an Air Canada MAX 8 ran into engine problems. Not a day after it was rectified. This is not in overall terms, such an unreasonable thing, but it’s a MAX and there shouldn’t be anything that could have happened so quickly. Even if it ends up being a very minor problem, it sends jitters through anyone, its a MAX and people are rightly touchy about anything going wrong.
Questions will be asked, process re-assessed and all of that takes time and a lot of money. The MAX recertification, rewiring, retraining, reprogramming and restoring to service project is costing huge amounts of money.
Rolls Royce is also up to its neck in problems too. So much is going on and costing it so much money that its now looking to postpone work on its UltraFan programme, the engine for the next generation of larger aircraft. Revised A350’s may have it as an option, though that now looks ever more unlikely.
The company has lost some $2 billion in costs related to the 787 Trent-1000 faults, which ended up being a cascade of issues. One was fixed which created another, and another and another, leading to rolling problems with the engines even as they were replaced. Then it had problems with A350 fan blades and part of the engine core.
The full cost of redevelopment, compensation (which often runs into hundreds of millions), and Rolls Royce’s business model has cost it dear.
Rather than lease out engines or sell them direct, it hit upon the idea of low cost lease terms and then a pay-by-the-hour model as engines actually fly. This was highly attractive to airlines (and very profitable to Rolls Royce) and a big part of the sales success around the Trent-1000. So when they weren’t flying, both because of technical issues, then because of that and Covid in combination, Rolls Royce hit a financial brick wall as income collapsed, that will take it several years to get around.
It’s impacted its bottom line, created redundancies, lost key workers in a high tech industry and slashed its R&D budget. And much of it is its own short term driven fault. They aren’t the only ones. GE to a lesser extent and P&W have both suffered over-hasty development of engines, especially on the MAX, Neo and A200 series.
The need to get engines on aircraft to meet airline demands for manufacturers to hit ridiculously high production targets left all of them deeply exposed and they’re lucky that they got away with it pretty much without a serious incident.
They now have an opportunity to re-set their longer term goals, to appreciate that time, while it costs money, is better spent on getting things right than risking aircraft, crew, passengers and their own reputations when getting it wrong out of greed and commercial pressure.
It is my sincere hope that lessons of the decade 2011-20 have been learned and that we go into this new decade, 2021-30, with a little more reality, a little more humility and a lot less greedy for quick financial gain, which inevitably, as with the MAX, costs people their lives. And if you need to be reminded, 2020 was a worse year for air accident casualties than 2019, and that was with vastly fewer aircraft flying.