Opinion: how do Boeing deal with the contentious issue of brand damage around their 737-Max 8 aircraft?
Launched by Boeing in 2011, performing its first flight in 2016 and heralded by Ryanair's Michael O'Leary as a "game-changer", the 737 Max 8 is the fastest-selling fourth generation of the 737, the most popular jet aircraft of all time. It comes with seating capacity of 178 to 210, a list price of $122 million and has notched up sales orders in the region of 5,000 (350 have been made to date).
All seemed to be going well with the plane until October 29th last when a Lion Air model crashed near Jakarta, Indonesia, claiming all 189 lives on board. While investigations were ongoing and with Boeing seemingly taking a "full confidence" stance, a second plane went down just outside Addis Ababa on March 10th this year killing all 157 passengers and crew.
The similarities in the crash profiles seemed too close for coincidence and aviation authorities around the world quickly began to ground the model. This knocked some 10% off the $220 billion value of the biggest aircraft manufacturer in the world.
From RTÉ One's Nine News, Boeing CEO Dennis Muilenburg addresses shareholders the company's AGM
Following the publication of preliminary reports into both crashes, Boeing CEO Dennis Muilenburg issued a statement expressing sorrow "for the lives lost" and acknowledging the role of the flight control system (MCAS) in both cases, adding "it’s our responsibility to eliminate this risk, we own it and we know how to do it". He apologised again at the company’s annual general meeting in Chicago this week, but did not accept that the system is flawed, stating rather that its activation was "a common link in the chain of events" that resulted in the two crashes.
When brands hurt
Whilst safety is always a top priority for manufacturers, there are many heavily-used products in the marketplace that can and do inflict damage. From Whirlpool’s recall of faulty tumble dryers to the Volkswagen emissions scandal to the injuries and fatalities attributed to driverless cars, consumers seem to rely more and more on regulatory authorities for protection by rigorously enforcing safety standards and robustly pursuing offenders.
As the global fleet of commercial airplanes make about 40 million flights per year with four billion passengers on board (an average of 100 customers per flight), safety concerns can have fatal consequences not just for the customer, but for the future of the brand.
From RTÉ Lyric FM's Culture File, branding expert Eoghan Nolan on the art of rebranding
Rebrand or relaunch?
Organisations may decide to rebrand for several reasons, including rebuilding reputation after a major PR scandal, changing consumer perceptions, adapting to competitive pressures, signalling a significant change of direction or to shake up a stale, outdated image. These efforts may be reactive in the face of declining sales or proactive as the company sees an opportunity. They can prove to be highly successful (Apple, Old Spice, Burberry) or less than inspiring (Mozilla, New Coke, Gap).
However, some or all of the very same reasons may apply to organisations who decide to continue with the same brand, often boosted by additional advertising. This includes BP after Deepwater Horizon, the biggest marine oil spill in history and Facebook after a number of recent, serious data protection failures.
Doors to manual
In essence, the choices available to Boeing range along the spectrum of all or nothing. Favouring the all side of the range is US president Donald Trump, who tweeted that "if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name. No product has suffered like this one". But taking this stance may risk being accused of selling a faulty product, which is contrary to Muilenburg's statement that "we haven’t seen a technical slip or gap in terms of the fundamental design and certification."
From RTÉ One's Prime Time, can a simple software change make Boeing's 737 Max8s safe to fly?
Significantly rebranding the 737 Max may also have implications for the other aircraft in Boeing’s portfolio. Should all models be rebranded? Might the rebranded Max be then seen as safer than the other aircraft as it has been fixed? Would the additional great features be offered on all planes?
Gravitating towards the nothing side of the spectrum would appear to be the preferred strategy of Boeing based on the evidence available from its actions, press releases and interviews to date. It is including the two key audiences that it needs to convince that the aircraft is safe in its testing of software and training modifications (that is, technical regulators and airlines - passengers tend not to be familiar with aircraft types).
Boeing is also consistently maintaining that the certified design is not flawed and that the revised software will make the plane "even safer". It can also be confident that Airbus, the other member of the airplane manufacturing duopoly, would never use safety in a competitive context as to do so would be unprecedented in the industry.
It is not in airlines’ longer term interests to put further financial pressure on Boeing and end up with a monopoly supplier
Moreover, Boeing knows that it is unlikely to witness a mass switch of customer orders from the 737 Max to Airbus’ A320neo, its key single-aisle competitor, as the backlog on the latter is about three years. Finally, it is not in airlines’ longer term interests to put further financial pressure on Boeing (operating costs estimated at $1 billion to date with many more settlements and legal actions to follow) and end up with a monopoly supplier.
Adopting such a minimalist approach to relaunching the 737 Max may not go down well with Donald Trump. But, as he said himself in the aforementioned tweet, "but again, what the hell do I know?".
Dr Padraic Regan is an independent consultant, researcher and publisher on aviation and former Ussher Assistant Professor in International Strategic Management at Trinity College Dublin. Professor Sarah Browne is Assistant Professor of Marketing and Strategy in the School of Business at Trinity College Dublin.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ