A decidedly intense start to the month for Boeing, the largest U.S. aircraft manufacturer and leader in the aerospace industry. The Justice Department of the United States proposed to the Company to plead guilty to fraud in relation to two fatal plane crashes involving its 737 Max. In the meantime, to avoid future accidents, the American giant has decided to to acquire one of its most important suppliers, Spirit AeroSystems, which was responsible for some problems on the 737 Max.
Meanwhile, news comes from China of a new rival which is preparing to challenge Boeing and Airbus, the other major leader in the sector. It's about the new C939 jet, developed by the state company Comac, which aims to conquer the large aircraft market.
Plea deal offer to Boeing for fraud
According to American sources, the US Department of Justice is about to propose that Boeing plead guilty to fraud in relation to two recent fatal accidents involving its 737 MAX airliners. The Department has already informed the families of the 346 victims of the two incidents of his intention to propose a plea deal, one move greeted with anger by family members, who hoped for further legal action against Boeing.
In the proposal to Boeing, in addition to pleading guilty to fraud, it also asks that the company accept a independent monitor to ensure compliance with anti-fraud laws.
Boeing's final decision on accepting the deal is awaited by the end of next week, and could significantly affect the company's reputation and future operations.
Boeing: stock transaction to acquire Spirit AeroSystems
Boeing announced theintends to acquire Spirit AeroSystems, an American aerostructure manufacturer, for 4,7 billion dollars in a all-stock transaction. Spirit, based in Wichita, Kansas, is a longtime partner of Boeing, producing key parts such as fuselages and other crucial components for the 737 and 787 Dreamliner models. The acquisition aims to improve the safety and quality control of Boeing products.
In March, Boeing revealed it was in talks to acquire Spirit, just weeks after a fuselage panel broke off in mid-air from a nearly new Boeing 737 Max 9 on an Alaska Airlines flight, causing a new crisis for the company. . Spirit was responsible for producing fuselages for the 737 and other parts, including sections of the 787 Dreamliner.
In 2005, Boeing had spun off operations in Kansas and Oklahoma which became today's Spirit AeroSystems. Last year, Boeing accounted for about 70% of Spirit's revenue, while about a quarter came from making parts for Airbus, Boeing's main rival.
THEacquisition of Spirit is valued at $37,25 per share, bringing the total value of the deal to approximately $8,3 billion, including debt. The CEO of Boeing, Dave Calhoun, stated that this acquisition is one of the most significant actions to strengthen the company's quality and production. The agreement, scheduled to close in mid-2025, is subject to approval from regulators and Spirit shareholders.
Calhoun, who announced his resignation at the end of the year, said the integration of Spirit will fully align the two companies' manufacturing systems and workforces. “Of the many actions we are taking as a company, this is one of the most significant in demonstrating ours unwavering commitment to strengthening quality and to ensure that Boeing is the company the world needs,” he said in a message to employees. Boeing will take over substantially all Boeing-related business operations, as well as additional commercial, defense and aftermarket operations. Calhoun said this settlement is in the best interests of the public, airline customers, Spirit and Boeing employees, shareholders and the country at large.
As part of the deal that would result in the dissolution of Spirit, some of the Kansas-based assets would also pass to Airbus. The European company will acquire the production lines dedicated to its aircraft, receiving $559 million from Spirit. These operations include facilities in Belfast, Northern Ireland, where the A220 wings and center fuselage are produced, the A220 pylons in Wichita, Kansas, and the A350 fuselage sections in North Carolina.
Boeing: a new rival arriving from China
News comes from China of a new rival ready to challenge Boeing and Airbus in the large aircraft market. It's about the new jet C939, developed bystate company Comac (Commercial Aircraft Corporation of China).
Comac started i preliminary projects for the C939, a large aircraft intended for long-haul flights. This project follows the C929, a twin-aisle aircraft that has already suffered significant delays. Although China is still far from bringing a testable prototype to the market, the new jet represents a potential threat for Boeing and Airbus in the long term.
The challenge, however, still seems far from being achievable. Industry experts, such as Willie Walsh, director general of Iata, e Tim Clark, president of Emirates, believe that it will take at least 20 years before Chinese jets can seriously compete in the global market. At the moment, China's aviation industry appears to be aimed primarily at the domestic market, but over time Comac's aircraft could enter Western markets and pose a significant challenge to Boeing and Airbus.
“Comac is doing serious work. For the moment, it's a matter of discussion affects the Chinese market, but over the years Chinese jets will be able to come to the West,” Willie Walsh said at the IATA general assembly in Dubai in early June. He further estimated that “it will take at least twenty years, but the Chinese industry will be a serious competitor.”
