Boeing chair to meet key airline customers without planemaker's CEO, sources say

By David Shepardson and Rajesh Kumar Singh

WASHINGTON/CHICAGO (Reuters) -Major airline chiefs plan to hold discussions with Boeing board chair Larry Kellner in meetings that will not include CEO David Calhoun after raising concerns over an Alaska Airlines mid-air emergency and ongoing production issues, sources said.

A group of U.S. airline CEOs sought meetings with Boeing directors to express concern over the Alaska Airlines 737 MAX 9 accident, the Wall Street Journal reported earlier, saying it was an unusual sign of frustration with the manufacturer's problems and its leader Calhoun.

An airline source familiar with the meetings told Reuters the carriers wanted to raise concerns directly with Kellner, who previously served as the CEO of Continental Airlines, and understands their frustration with ongoing delays and quality issues.

In the U.S., the CEOs of American Airlines, United Airlines, Southwest Airlines and Alaska Airlines plan to hold meetings with Kellner, according to a separate airline source.

The discussions, expected to include at least one other Boeing director, will also include some large foreign airline customers, the sources with knowledge of the matter said on condition of anonymity. Boeing CEO Dave Calhoun supports the meetings but will not attend, a company official said.

A Wall Street analyst said the decision to hold meetings without Calhoun did not appear to be a good sign for the CEO's longevity at the company. The analyst declined to be named due to the sensitivity of the matter.

Boeing said it had been actively focused on listening to its customers at all levels of its company.

American, United and Alaska Airlines declined to comment.

Southwest said it had nothing to report. "We have ongoing, frequent communication with Boeing, which is not new and will continue," it said.

Calhoun took over as CEO in 2020 after two fatal 737 MAX 8 crashes after a decade on Boeing's board. He has vowed to fix quality problems and ensure accident like the mid-air Alaska Airlines panel blowout "can never happen again."

Michael O'Leary, CEO of Boeing's biggest European 737 MAX customer Ryanair, told Reuters on Wednesday he was meeting with senior company executives in Dublin to discuss prolonged delivery delays.

The order backlogs and delays in getting planes are frustrating airline executives, who have started to cut routes and are seeking alternatives to meet passenger demand that is set to hit record levels this spring.

Federal Aviation Administration chief Michael Whitaker said on Tuesday Boeing must improve safety culture and address quality issues before the agency will allow the planemaker to boost 737 MAX production.

The FAA in late January took the unprecedented step of telling Boeing it would not allow the company to expand 737 MAX production in the wake of the Alaska Airlines mid-air emergency.

The FAA will only permit an increase when Boeing is running a quality system safely, Whitaker said, adding he has the tools to hold Boeing accountable and fully intend to use them.

Whitaker said Boeing is allowed to produce 38 of the 737 planes per month, but actual current production is lower than that.

Boeing Chief Financial Officer Brian West said on Wednesday: "We are the ones who made the decision to constrain rates on the 737 program... and we'll feel the impact of that over the next several months."

The Justice Department has opened a criminal probe into the January MAX 9 cabin panel blowout. The National Transportation Safety Board has said the plane that lost the cabin panel was missing four key bolts.

(Reporting by David Shepardson in Washington and Rajesh Kumar Singh in Chicago; Additional reporting by Allison Lampert in Montreal and Kannaki Deka in Bengaluru; Editing by Jamie Freed)