Dubai: Nearly nine months into the global grounding of Boeing’s 737 Max model, the company’s chief executive officer Dennis Muilenburg resigned from his position on Monday, in a move the company hopes will “restore confidence.”
Muilenburg will be replaced by current chairman David Calhoun, who will take on the role of CEO and president effective January 13, 2020.
Boeing said in a statement that its board decided “a change in leadership was necessary to restore confidence in the company moving forward, as it works to repair relationships with regulators, customers, and all other stakeholders.”
Between now and January 13, chief financial officer Greg Smith will serve as interim CEO, while Calhoun exits his non-Boeing commitments.
The resignation comes as Boeing continues to face pressure for its handling of its 737 Max model, which has been grounded globally since March 2019 following two fatal crashes. Boeing has been working to get the Maxs recertified by regulators, but it remains unclear exactly when that will be.
So long has the delay in recertification taken that Boeing last week said it will be temporarily halting the production of the 737 Maxs, which were Boeing’s best sellers. The company said it wants to instead focus its efforts on ensuring the Maxs are safe to fly again.
In the UAE, flydubai is the only airline that owns 737 Maxs and has had to ground all 13 of its Maxs; a move that has caused a “significant” dent in its profits as it had to limit its operations, according to the airline.
Flydubai earlier said it expects to receive compensation from Boeing for the impact the grounding has had on its operations. While Boeing has been providing customers with some updates on the progress of the recertification, more and more airlines are growing impatient and demanding better communication.
In November, during the Dubai Air Show, Shaikh Ahmed Bin Saeed Al Maktoum, chairman of flydubai, and chairman and chief executive officer of Emirates Airline and Group, said that while he is sure Boeing is under a lot of pressure for its 737 Maxs, the company needs to communicate much better than they did in the past. He said he hoped Boeing will come up with something acceptable to the industry once the software of the Max jets is updated and once any flaws are fixed.
At the Dubai Air Show, Boeing said that it remains “well-positioned” despite the saga of the 737, as well as delays in another model, the 777X.
On Monday, Boeing said that under the new leadership, it will “operate with a renewed commitment to full transparency, including effective and proactive communication with the [Federal Aviation Administration], other global regulators, and its customers.”
The company said it is now at a “critical juncture,” and the new CEO “recognises the challenges we must confront.”
Boeing’s share prices gained 3.6 per cent as soon as the news came out. The stock is still lower than it was in March, prior to the 737 grounding. Share prices have fallen by over $100 (or more than 23 per cent) since March 1.