By David Shepardson

Boeing Faces Regulatory Challenges Under New CEO

WASHINGTON (Reuters) – New Boeing (NYSE:BA) CEO Kelly Ortberg met with the head of the Federal Aviation Administration (FAA) this week amid ongoing regulatory issues and heightened scrutiny, confirmed an agency official.

Ortberg communicated to employees via email on Friday that he had discussed the company’s safety and quality plan with the FAA. FAA administrator Mike Whitaker had previously restricted Boeing from increasing production of its popular 737 MAX after a door panel failure on a Jan. 5 flight involving a new Alaska Airlines jet.

Since taking over as CEO on Aug. 8, Ortberg emphasized to the FAA the company’s commitment to genuine cultural change, encouraging employees to voice concerns about potential issues and to better coordinate resources to address these challenges.

This week marked Ortberg’s first board meeting as CEO; he also engaged with Pentagon officials and has ongoing labor negotiations to manage.

Whitaker indicated in May that he would visit Seattle in September to evaluate Boeing’s quality initiatives. He noted that the FAA would maintain a stronger on-site presence at Boeing and fuselage supplier Spirit Aerosystems for the foreseeable future.

During a Senate Commerce hearing in June, Whitaker criticized the FAA’s prior oversight, stating it had been “too hands-off” with Boeing. He remarked, “The FAA should have had much better visibility into what was happening at Boeing before Jan. 5.”

In September, Boeing announced the suspension of test flights for its 777X, pending certification, after cracks were discovered in a component connecting the engine to the airplane structure during maintenance checks. Cracks were also identified on other test aircraft.

In July, Boeing commenced certification flight testing of its long-delayed 777-9 with FAA regulators on board after receiving type inspection authorization, a crucial step towards certifying a new aircraft.

Additionally, last month, Boeing agreed to plead guilty to a charge related to a criminal fraud conspiracy and is set to pay at least $243.6 million following a breach of a 2021 arrangement with the U.S. Justice Department.