On Thursday, Boeing’s shares dropped 5% in the wake of a recent crash involving an Air India aircraft, raising fresh concerns about the company’s operational safety amid ongoing scrutiny. The event has come to light during an especially tumultuous time for the Chicago-based planemaker. The company has been dealing with huge crises over the past few years, highlighted by the 18-month long global grounding of its 737 Max model after a software defect.
Boeing’s misfortunes deepened last month when it squeaked by a criminal prosecution. The company had previously come to an agreement with the US Department of Justice (DoJ) after it allegedly entered into a conspiracy to “obstruct and impede” investigations into its safety practices. This settlement arrived as the business nonetheless struggled to regain its repute after a number of security disasters.
Just ask Kelly Ortberg, who came out of retirement a year ago to wake up the moribund aerospace behemoth. Now, she has a pretty intimidating to-do list facing her. The 787 Dreamliner is one of the sustainable products under her leadership that led Boeing to celebrate last month by carrying its billionth passenger on the Dreamliner. This relatively new aircraft has a long history of positive safety records. Following the recent crash, there’s been increased scrutiny on Boeing’s practices when it comes to safety procedures and operational practices.
In April, Boeing announced the resulting “improved operational performance,” thanks to its new “safety and quality” commitment. Yet, this sunny disposition is in stark conflict with the company’s financial woes. In 2022, Boeing lost nearly a billion dollars each month due to a combination of safety crises, quality control issues, and prolonged strikes by workers.
The ongoing grounding of the 737 Max model had profound financial impacts. As a consequence, Southwest Airlines agreed to a $428 million settlement for the damage inflicted by the fleet’s prolonged desertion. Congressional investigations into Boeing’s internal culture discovered runaway alarming practices. In March of last year, John Barnett, a former quality control manager, committed suicide. This tragic incident has thrown a spotlight onto the mental health resources provided to employees in stressful, competitive workplaces.
As another whistleblower engineer Sam Salehpour found, this hostile environment pervaded Company X as a whole. He was subjected to harassment and threats after warning about safety in the aircraft fleet. News reports from 2019 painted a grim picture. Under extreme pressure, workers intentionally installed defective parts on planes while manufacturing them, which could cause further breaches of trust in Boeing’s manufacturing integrity.
In 2024, Boeing was faced with a financial crisis when a door broke off in-flight on an Alaska Airlines flight. This single incident resulted in more than $160 million in compensation payments. Each of these incidents compounds the challenges faced by Ortberg as he seeks to restore trust in Boeing’s safety record and operational integrity.
In regards to the recent Air India crash, Boeing stated, “We are deeply saddened, and are committed to transparency and cooperation with investigations.”
“Our thoughts are with the passengers, crew, first responders and all affected,” – Boeing
Our company is working closely with Air India to obtain further details about the cause of the crash. As the investigations move forward, stakeholders—including its investors—are watching Boeing’s actions and the impact its being held responsible for will have on both its business practices and bottom line.