Boeing fires CEO as 737 MAX crisis deepens

The 737 MAX grounding was the biggest crisis of Dennis Muilenburg’s 34-year tenure at Boeing, where he started as an intern in 1985. (File/Reuters)
Short Url
Updated 24 December 2019

Boeing fires CEO as 737 MAX crisis deepens

  • The decision to remove Dennis Muilenburg follows a year of industrial setbacks

LONDON: Boeing Co. has fired CEO Dennis Muilenburg, following a year of intense scrutiny and industrial setbacks set off by twin fatal crashes of its 737 MAX jetliner.

The management shakeup comes as the world’s largest planemaker struggles to win regulatory approvals for its grounded best-selling jetliner while trying to regain trust with passengers and airline customers.

Chairman David Calhoun will take over as CEO and president, effective Jan. 13, the company said, adding that a change in leadership was necessary to restore confidence in the company.

The company’s shares rose nearly 4 percent in early trading.

The 737 MAX grounding was the biggest crisis of Muilenburg’s 34-year tenure at Boeing, where he started as an intern in 1985, rising through the company’s defense and services ranks to the top job in 2015. 

The company said this month it would stop production of the jets in January.

A senior industry source called the wording of Boeing’s statement “brutal.” Another said the decision was inevitable after spiraling pressures from the 737 production halt to a public slap-down from the FAA, topped off by an embarrassing space launch snafu on Friday.

Speculation that Muilenburg would be fired had been circulating in the industry for months, intensifying in October when the board stripped him of his chairman title.

A Boeing official said the board deliberated over the weekend and they made the decision to fire Muilenburg in a phone call on Sunday.

HIGHLIGHT

The management shakeup comes as the world’s largest planemaker struggles to win regulatory approvals for its grounded best-selling jetliner.

Aerospace analyst Richard Aboulafia said the appointment of Calhoun, who previously served as head of Blackstone Group’s private equity portfolio operation, will provide needed short-term stability, but not the long-term “emphasis on engineering” the company needs.

“Calhoun is respected in the industry,” Aboulafia said on Monday. “But long-term, does he bring the right tool kit? Private equity leans companies out. That’s not Boeing’s problem right now.”

Board member Lawrence Kellner will become non-executive chairman of the board effective immediately, the company said. Chief Financial Officer Greg Smith will serve as interim CEO during the brief transition period.

“Under the company’s new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers,” Boeing said.

 

 


Flydubai launches first scheduled Dubai-Tel Aviv flight

Updated 41 min 39 sec ago

Flydubai launches first scheduled Dubai-Tel Aviv flight

  • The Dubai carrier will fly the route twice daily
  • Israeli airlines El Al and Israir are both expected to launch their commercial services between the cities next month

DUBAI: Budget airline flydubai on Thursday launched direct flights to Tel Aviv, the first scheduled commercial service between the two cities, following the normalization of ties between the UAE and Israel.
Israeli Prime Minister Benjamin Netanyahu will be on hand for the arrival of the inaugural flight after its nearly four-hour trip, his spokesman said.
“PM Netanyahu will attend this morning the welcoming ceremony for the first @flydubai commercial flight that will arrive at Ben-Gurion International Airport,” Ofir Gendelman said in a tweet.
“These are the fruits of peace Dear Emirati tourists, welcome to Israel!”
The United Arab Emirates in September signed a landmark US-brokered deal to formalize relations with Israel, the first such agreement by an Arab state in the Gulf.
With their economies hard hit by the coronavirus pandemic, the UAE and Israel are hoping for rapid dividends from the normalization deal, including an influx of tourists as Dubai enters its winter high season.
“The start of scheduled flights will contribute to economic development and create further opportunities for investment,” flydubai CEO Ghaith Al-Ghaith said when the service was announced earlier this month.
The Dubai carrier will fly the route twice daily, and Israeli airlines El Al and Israir are both expected to launch their commercial services between the cities next month.
Etihad Airways, based in the UAE capital Abu Dhabi, has said it will begin flying to Tel Aviv in March 2021.
The UAE became only the third Arab country to normalize ties with Israel, following Egypt in 1979 and Jordan in 1994.
The two countries have already signed treaties on visa-free travel — although that is yet to come into force — along with accords on investment protection, science and technology.
Since the historic agreement, Bahrain and Sudan have followed suit and agreed to forge ties.
The agreements shattered a longstanding Arab consensus that there should be no normalization with Israel until it reaches a comprehensive peace deal with the Palestinians.
After the UAE deal was announced by President Donald Trump in August, El Al flew a delegation of US and Israeli officials — led by Trump’s son-in-law Jared Kushner — to Abu Dhabi in a historic direct service between the two countries.
That was followed by an official visit by a UAE delegation to Tel Aviv as well as a string of charter flights carrying business groups.