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Emirates chief backs Boeing-Spirit merger amid factory crisis

Tim Clark urges Boeing to address its quality problems quickly

One of Boeing’s biggest customers, Dubai carrier Emirates, threw its support behind a possible Boeing takeover of Spirit AeroSystems, saying it would be a step towards resolving the planemaker’s industrial and quality crisis.

US regulators are carrying out factory audits at both Boeing and its supplier Spirit and have reported findings following the dramatic blowout of a dummy door on a 737 MAX 9 airliner in January, which has been blamed on missing bolts.

Emirates airline president Tim Clark told reporters on Wednesday that Boeing should address its quality problems as quickly as possible with the undiluted attention of its board and top management or face questions over its future.

Boeing said last week it was in talks to buy its former subsidiary. Separately, industry sources said Spirit and Boeing’s European rival Airbus had explored the idea of Airbus taking over some Spirit operations that supply it with parts.

Spirit makes around 70 per cent of the 737 MAX and builds the forward fuselage for the 787 and future 777X, both of which Emirates has ordered. It was spun off from Boeing in 2005.

“I never understood that at the time. It would be like us saying we are going to take our engineering and operations and give them to someone else to run,” Clark said. “This is anathema to our way of thinking but that is what they did and I think it has been a problem for them ever since.”

Clark is seen as one of the industry’s most influential leaders and has in the past criticised both Boeing and Airbus for industrial flaws and delays, or for their strategic choices.

Speaking in London last week, he appeared to cast doubt on the future of Boeing’s leaders, but stopped short of calling for heads to roll. He mused whether Boeing needed new governance and noted this “invariably involves changing the people”.

Speaking on the sidelines of the ITB travel fair in Berlin on Wednesday, Clark gave lukewarm backing to Boeing CEO Dave Calhoun and called for direct involvement by the company’s board.

Asked how long he thought it would take for Boeing to get itself back on track, Clark said: “It depends how much resource they put in it. It requires the undiluted focus of the board, to the exclusion of everything else.

Boeing priorities

“They must, all of them, deal with this problem first and foremost. Don’t worry about anything else, just get this job done. Because if you don’t, your company will go out of existence. Another event like this will almost cripple the company,” he said, adding the US government and travelling public expected nothing less.

“I think Calhoun and his colleagues are on it, but ... it’s up to them,” he said.

Calhoun said last week that Boeing would develop an action plan that demonstrates “profound change” and that its leadership was totally committed to meeting that challenge.

Clark indicated some progress in a separate dispute with Rolls-Royce over the durability of engines for the A350-1000 but insisted he would not order the Airbus jet until maintenance improvements being planned by Rolls could be demonstrated.

Rolls-Royce CEO Tufan Erginbilgic visited Dubai last week and outlined the company’s latest plans to invest a billion pounds in improvements to the Trent engine family, he said. “He knows he has a problem and is determined to sort it out,” Clark added.

On wider airline industry trends, Clark said strong demand was expected to maintain higher fares and noted a surge in air cargo activity as a result of attacks on Red Sea shipping.