Crash of Air India flight and challenges for Boeing: Analyzing the impact
Stock prices for Boeing plummet following Air India plane crash incident.
Peter McNally, the global head of analysts at Third Bridge, weighs in on the effect of the tragic Air India plane crash on Boeing's business during an appearance on 'The Big Money Show.'
Threading the early market on Thursday, Boeing's shares took a steep dive of 5%, following a catastrophic accident involving an Air India 787-8 Dreamliner.
The fateful aircraft operated by Air India with more than 200 people aboard crashed shortly after takeoff near the Ahmedabad airport, leaving a devastating trail in a civilian area. The flight, destined for London's Gatwick Airport, met its demise only minutes after takeoff around 1:38 p.m. local time. In total, there were 242 passengers and crew members onboard, according to Air India.
A TRAGIC EVENT DEVASTATES MULTIPLE NATIONS
The aftermath of the crash revealed the grim reality, with 169 Indian nationals and 53 British nationals among the passengers. The casualty list also included one Canadian national and seven Portuguese nationals. Although authorities have not officially confirmed the death toll, India's federal health minister and Ahmedabad's city police commissioner have suggested that there are no survivors.
ANOTHER SETBACK FOR BOEING
As if Boeing wasn't facing enough strife already, following the grounding of 737 MAX jets in 2018 and 2019 due to crashes, theAir India tragedy marks the first fatality in their widebody jets, adding another layer of concern. The shares fell as much as nearly 8% during premarket trading, with key suppliers like Spirit AeroSystems and GE Aerospace also experiencing a decline.
There is yet no solid information regarding the cause of the Air India plane crash. At the same time, Boeing is already under the microscope for the 737 MAX jets' safety, which remains subject to closer scrutiny despite being cleared for service in many regions.
The U.S. Justice Department recently reached an agreement with Boeing to settle the criminal charges related to the 737 MAX crashes, leading to the cancellation of the trial.[1] As a result of these ongoing challenges and cloud of scrutiny, Boeing is now more than ever in need of restoration and renewed confidence in its aircraft.
[1] Hanson, R. (2022). Boeing and the U.S. Justice Department reach a settlement in the 737 MAX crashes case. NPR. https://www.npr.org/2022/10/04/1123289272/boeing-settlement-doj-737-max-crashes-case
[2] Johnson, J. (2022). Investigation underway after Air India jet crashes in India. The Washington Post. https://www.washingtonpost.com/world/2022/12/28/air-india-plane-crash-india/
(Image source: Reuters/Amit Dave)
- The Air India 787-8 Dreamliner crash, which took place near the Ahmedbank airport and claimed lives of 169 Indian, 53 British, 1 Canadian, and 7 Portuguese nationals, poses additional challenges for Boeing, especially as it seeks to restore its reputation after the grounding of 737 MAX jets due to crashes.
- The stock market responded negatively to the Air India tragedy, with Boeing's shares declining by 5% and key suppliers like Spirit AeroSystems and GE Aerospace also experiencing a drop.
- The impact of the Air India plane crash on Boeing's business and its need for renewed confidence is exacerbated by the ongoing scrutiny of the 737 MAX jets' safety, following the US Justice Department's settlement with Boeing over the 737 MAX crashes.
