Boeing CEO to meet with senators scrutinizing 737 MAX 9 blowout

Boeing CEO Dave Calhoun will meet this week with U.S. senators to answer questions about the 737 MAX 9 grounding, as executives for longtime Boeing customer United Airlines raised questions over billions of dollars of orders for 737 MAX 10 jets.

Calhoun is set to hold meetings starting Wednesday on Capitol Hill. He is scheduled to meet with Senators Ted Cruz, a Republican, and Mark Warner, a Democrat, among others following the mid-air emergency landing of a new Alaska Airlines jet, sources told Reuters. Boeing declined to comment. Calhoun will also meet with Senator Maria Cantwell, who chairs the Commerce Committee. Last week, she said she plans to hold a hearing after the Federal Aviation Administration (FAA) grounded 171 MAX 9 airplanes. A spokesperson for Cantwell said she was meeting with Calhoun at Boeing's request.

Cantwell and Cruz, the committee's top Republican, held a closed-door briefing last week on the grounding with FAA Administrator Mike Whitaker and National Transportation Safety Board chair Jennifer Homendy. "This investigation needs to find out where the mistake was, what caused this accident, and critically what needs to be done to make sure it doesn't happen again," said Cruz last week.

Numerous lawmakers on Capitol Hill have questioned Boeing. The company told Senators Ed Markey, JD Vance and Peter Welch in a previously unreported Jan. 17 letter that it was working to "restore trust with out regulators and our customers." On Tuesday, United Airlines CEO Scott Kirby said the airline, which has ordered 277 MAX 10 jets with options for another 200, would build a new fleet plan that does not include a model already mired in regulatory and delivery delays.

The FAA grounded most of Boeing's MAX 9 jets for checks after a plug replacing an unused exit door tore off an Alaska Airlines jet on Jan. 5, forcing an emergency landing. Industry watchers have been seeking concrete signs that Boeing's woes with the MAX 9 and the legacy of earlier MAX safety groundings are undermining support for the larger MAX 10, which makes up more than a fifth of outstanding MAX orders.

"I think the MAX 9 grounding is probably the straw that broke the camel's back for us," Kirby said in an interview with CNBC Tuesday. Boeing shares closed down 1.6% and are down 15% since the incident.

The MAX 10 does not have the same kind of door-plug system as the MAX 9, but the grounding has raised concerns that the incident could delay regulatory approval and delivery of the MAX 10, as well as temper broader plans for higher production. Alaska Airlines CEO Ben Minicucci told NBC News in an interview that aired Tuesday the airline found "some loose bolts on many" Boeing 737 MAX 9s during inspections. The FAA is still reviewing data from an initial group of 40 planes and has not said when it may allow planes to resume flights.

Late Sunday, the FAA urged operators of 737-900ER planes with the same door plug to immediately inspect them after some airlines had noted "findings with bolts" during maintenance inspections. Delta Air Lines told Reuters it had completed inspections of its 130 737-900ER planes and said "at this time we do not anticipate any operational impact."

After disappointing MAX 9 sales, Boeing is betting on the larger-capacity MAX 10, to dent the runaway lead of Airbus's A321neo at the busiest end of the market. Analysts say a full rollout of the MAX line-up is crucial to help Boeing stabilize its roughly 40% share against Airbus and generate sufficient cash.

In the best-case scenario, MAX 10 deliveries are five years behind their original delivery date, Kirby estimated. He later said United would not cancel the jets, just remove them from internal plans. Industry experts say airlines rarely cancel orders for fear of losing deposits, but often juggle models or else use public pressure to help win concessions.

Boeing Commercial Airplanes CEO Stan Deal said in a statement "We have let down our airline customers and are deeply sorry for the significant disruption to them, their employees and their passengers." Analysts say United has already effectively suspended a longstanding order for Airbus A350s by repeatedly deferring it. United reiterated it was looking at the 2030s timeframe.

While Kirby's remarks left questions hanging over the MAX 10 orders, industry sources said the airline also faces a dilemma as it races rivals to meet rising demand. Airbus is sold-out for similar planes until around 2030.

"It is not helpful for the MAX 10 when United, holding orders for 26% of the entire known MAX 10 backlog, says this," said Rob Morris, head of global consultancy at Ascend by Cirium. "But what will United do instead?"

Airbus declined to comment. GE 'CONFIDENCE'

Some commentators have called for changes in Boeing's top management and some airline executives also have been privately calling for a reset. This month, people familiar with the matter told Reuters United had become "incensed" with a supplier with which it shares corporate roots. It has been forced to ground 79 MAX 9 jets for which it had sold seats.

United on Monday warned of a hit to first-quarter results. But the CEO of Boeing's largest engine maker GE Aerospace, Larry Culp, threw his weight behind Boeing's leadership.

"They're an important customer. They're an important partner," Culp told Reuters, adding Calhoun and he were "in frequent communications on a whole range of issues." Asked if he had confidence in the ability of Boeing's leadership to fix its problems, Culp said: “I have confidence.”