Boeing has revealed on Friday, March 1, its preliminary discussions regarding the potential acquisition of Spirit AeroSystems, its former subsidiary, as part of the company’s strategic response to a crisis triggered by a mid-air panel blowout on January 5. The aerospace giant, aiming to regain control in the aftermath of the incident, expressed confidence that reintegration with Spirit would enhance aviation safety and elevate overall quality, a sentiment confirmed in a separate statement by Spirit AeroSystems.
In an associated development reported by Reuters on Friday, Boeing informed its suppliers of the postponement of anticipated increases in plane production. This decision aligns with the company’s efforts to rebuild industry confidence and fulfil regulatory demands for improved oversight of safety and quality control systems.
Boeing has faced repercussions from the recent 737 MAX incident, where a door plug detachment occurred at 16,000 feet. The incident prompted U.S. aviation regulators to restrict production, leading air carriers to explore additional aircraft deliveries from its competitor, Airbus.
Previous decentralisation of Boeing’s plane making capacity, coupled with workforce attrition and cost-cutting measures, has contributed to quality concerns. Reintegrating Spirit AeroSystems could potentially address these issues, providing Boeing with greater manufacturing control.
Spirit AeroSystems, spun off in 2005, has grappled with cost pressures and delivery challenges in recent years, prompting discussions with Boeing. Industry sources suggest that such a move could benefit Boeing by reducing Spirit’s production costs.
While Boeing had contemplated repurchasing Spirit AeroSystems earlier, concerns about the optics of buying back at a higher price deterred the decision. Spirit’s shares have experienced a 70% decline over the past five years, with a market value of US$3.3 billion, significantly below Boeing’s US$124 billion.
Analysts, such as Scott Mikus from Melius Research, speculate that Boeing recognises the strategic importance of reclaiming the core operations of Spirit AeroSystems in Wichita, acknowledging that divesting them was a previous misstep. Following these developments, shares of Spirit AeroSystems closed up 15% in regular trading on Friday, March 1, rising an additional 2% after hours. In contrast, Boeing’s shares closed down 1.8%, remaining flat post-market.
