Boeing is in talks to acquire its former subsidiary Spirit Aerosystems, and the aircraft maker has also postponed plans to increase production of the 737 aircraft as Boeing tries to resolve the crisis caused by the 737 Max 9 door drop.
Boeing has been affected by the MAX 9 incident for weeks. The U.S. aviation regulator FAA has curtailed plans to ramp up production of the 737 MAX, while airlines are considering buying more aircraft from Boeing's biggest rival, Airbus.
Recently, it was reported that Boeing is trying to acquire its largest airframe company, Spirit Company. "We are confident that the reintegration of Boeing and Spirit manufacturing operations will further strengthen aviation safety, improve quality, and serve the interests of our customers, employees and shareholders," Boeing said in a March 1 statement. Spirit confirmed the discussions.
Over the years, the fragmentation of Boeing's aircraft manufacturing capacity, coupled with the exodus of experienced workers and cost-cutting cuts, has severely affected Boeing aircraft quality. Two MAX crashes have undermined public and regulator confidence in Boeing's safety record.
In October 2018, a Max 8 aircraft of Indonesia's Lion Air crashed after takeoff, killing all 189 people on board. In March 2019, a second crash occurred on an Ethiopian Airlines MAX 8 flight, killing 157 people.
Boeing spun off Spirit in 2005, and in recent years Boeing has struggled with cost pressures and problems that have slowed aircraft deliveries and reduced balance sheets. Bringing Spirit back could solve some of those quality issues, as it would give Boeing more control and a say in the airframe maker.
Aviation industry veterans say the move could also help Boeing reduce production costs for Spirit. According to the source, Boeing had previously considered buying back Spirit, but Spirit wanted Boeing to make a higher **, and Boeing then dismissed the buyback.
However, Spirit's share price has lost 70% of its share price in the past five years, and its $3.3 billion market capitalization is far below Boeing's $124 billion market capitalization. ** Analysts said: "Boeing may have realized that the company's previous divestiture constituted Spirit was a strategic mistake. ”
Spirit, one of the major manufacturers of large aircraft structures in the aviation industry, has been facing cash flow issues and airframe quality issues for the Boeing 737 aircraft over the past few quarters. The company is also exploring the business of manufacturing wings for Airbus A220 aircraft in Ireland.
According to preliminary reports from U.S. investigators, the main problem with the MAX 9 aircraft door falling on January 5 was the loosening of the key nut. The door was made by Spirit, which has had a number of quality problems with MAX aircraft, the main problem being Spirit.
Therefore, it is reasonable for Boeing to choose to buy back Spirit, through the buyback, strengthen quality control, and try to solve the quality problem of the 737 MAX aircraft at the root. At present, the stock price of Spirit is extremely low, the company's operating performance is poor, and the reputation is damaged, the choice of acquisition is a wise move, and it is expected that Boeing can buy back at a good **.
In the aviation industry, safety always comes first, and Boeing's acquisition of Spirit is expected to better solve quality problems, which is a more responsible behavior for airlines and passengers, and it is still worth affirming.