Boeing is still reeling from the renewed scrutiny after a recent crash of one of its 737 Max models in Ahmedabad, India. The series of disasters has raised alarm about the safety and reliability of the aircraft. It had in fact enjoyed a stellar safety record. On Thursday Boeing stock was down by as much as 5% when the stock markets opened in New York. This significant decline underscored investor concerns about the potential fallout from the crash.
It took the original equipment manufacturer (OEM) Boeing 18 months to ground its 737 Max worldwide due to a software defect. This unexpected blow worsened the company’s already precarious financial situation. The company’s struggles continued, culminating in dramatic turns of events. In 2018, they negotiated a $428 million settlement specifically with Southwest Airlines for damages resulting from the long-term grounding of the fleet.
Indeed, Boeing just recently settled with the US Department of Justice (DoJ) to narrowly escape any criminal prosecution. This deal comes after the company was accused of “conspiracy to obstruct and impede” in connection with repeated safety violations. Share Boeing’s new retail CEO, Kelly Ortberg, came out of retirement a year ago to help restore Boeing to glory. Now, she’s facing unexpected challenges in her quest.
Even with the bad news, Boeing had a few bright spots recently. The company celebrated carrying its billionth passenger on the 787 Dreamliner last month and noted “improved operational performance” due to an “ongoing focus on safety and quality” in April. But all of these successes would appear to be eclipsed by the recent Tunnel crash.
As a response to Ahmedabad, Boeing has already issued statements of condolence. At this moment our hearts are with the passengers, crew, first responders and all impacted.” The company added. Safety is Boeing’s priority and the company is working closely with Air India to collect more information about the crash and its impact.
Besides the devastating loss of life, the horrible crash has exposed Boeing’s corporate culture surrounding the mistreatment of employees challenging safety. Engineer Sam Salehpour claimed retaliation, harassment, and threats after he raised complaints about safety and other problems to upper management. The East Palestine, Ohio-based company suffered a tragic loss last March when former quality control manager John Barnett committed suicide. He had 30 years of good service to the organization.
In addition to present-day operational challenges, Boeing is still facing the fallout from past scandals. Earlier this year in 2024, an Alaska Airlines flight experienced a door failure while in the air. In return, the company was recently required to pay $160 million in restitution.
Boeing is in the thick of a very difficult environment. Investors, regulators, and the flying public are eager to see how the company navigates these challenges. The aerospace giant will need to reassure stakeholders that it can uphold safety standards and restore confidence in its aircraft.