Aerospace & Defense

Boeing replaces head of commercial airplane unit amid 737 Max crisis

Key Points
  • Boeing is replacing the head of its commercial airplane unit amid the Max crisis.
  • Kevin McAllister led the division, which is immersed in a crisis after two 737 Max planes crashed.
  • The unit accounted for 60% of Boeing's revenue last year.
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Boeing's head of commercial airplanes to leave the company

Boeing replaced the head of its commercial airplane unit Tuesday as the manufacturer scrambles to convince regulators to allow its 737 Max plane back in service after two fatal crashes that killed 346 people.

Kevin McAllister is the senior-most executive to leave in the wake of the catastrophes. The commercial airplane division has been immersed in a crisis for nearly a year following the first of two 737 Max crashes. A second 737 Max went down less than five months later, prompting a worldwide grounding of Boeing's bestselling aircraft. All 346 people aboard the two flights were killed.

McAllister, who had led the unit since 2016, is being replaced by Stan Deal, a three-decade Boeing employee who most recently led its global services business, Boeing said.

The leadership change comes less than two weeks after Boeing's board stripped CEO Dennis Muilenburg of his chairman role, saying the move would allow him to better focus on getting the Max planes back to service.

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Boeing has named Stan Deal as new head of commercial airplanes

The commercial airplane unit is key to Boeing. It accounted for 60% of Boeing's more than $101 billion in revenue last year.

"We're grateful to Kevin for his dedicated and tireless service to Boeing, its customers and its communities during a challenging time, and for his commitment to support this transition," Muilenburg said in a release.

Boeing's chief information officer, Ted Colbert, will run the Boeing services unit.

Boeing's new chairman David Calhoun, a Blackstone executive and former General Electric executive, said the board "fully supports" the new appointments.

Aerial photo showing Boeing 737 Max airplanes parked at Boeing Field in Seattle, Washington, October 20, 2019.
Gary He | Reuters

After the second crash, Boeing halted deliveries and slashed production of the planes. The grounding has rippled through Boeing's supply chain and to airline customers that have been forced to cancel thousands of flights and forgo hundreds of millions of dollars in revenue.

Boeing is trying to regain the confidence of regulators around the world as the 737 Max remains grounded. The planes, of which it has more than 4,000 orders, are the source of 40% of Boeing's profit, according to Bank of America Merrill Lynch.

The company and federal regulators are the subject of numerous investigations about how the plane was designed and certified. Crash investigators have implicated flight-control software that malfunctioned on board the two planes, repeatedly pushing their noses down until their final, fatal dives. Pilots complained that they didn't know the program was on board the Max jets until after the first crash.

Boeing has developed a software fix for the program, but regulators haven't yet signed off on the changes, a move that would allow airlines to start flying the plane again.

Boeing's third-quarter earnings are expected to fall by nearly 42% from a year ago when it reports before the market opens on Wednesday, according to analysts polled by Refinitiv. Revenue is expected to drop close to 23% on the year to $19.44 billion.

READ MORE: The year that changed Boeing: Airplane maker struggles to regain footing since first 737 Max crash