Boeing's share price tanks over 4% after Air India flight crash in Ahmedabad

Indian Express

2 days ago

US aircraft maker Boeing's share price was down over 4.32 per cent on Thursday to $204.77 apiece at 7:17 pm IST, hours after an Air India operated 787 Dreamliner flying the Ahmedabad to London Gatwick Airport flight crashed within minutes of take off in Ahmedabad, Gujarat. Boeing's share price was down nearly 8 per cent in pre-market activity on Thursday.
The latest crash compounds the US-based jetmaker's woes as it battles scrutiny into its work practices on account of multiple plane crashes as well as whistleblower complaints in the recent past. To be sure, this is reportedly the first ever Dreamliner crash reported across the world.
The flight carrying 230 passengers and 12 crew members crashed minutes after take off at 1:30 pm.
Boeing CEO Dave Calhoun had stepped down in 2024, making way for Kelly Ortberg, amid calls from airlines and regulators to overhaul the aerospace manufacturing giant which was best with a host of issues related to quality and safety.
In January 2024, the door of an Alaska Airlines operated Boeing 737 Max jet flew out 9 minutes into a flight, prompting widespread scrutiny into the jetmaker.
Taking accountability for the incident, Calhoun told CNBC in an interview he had decided to step down from the helm, adding ' Let's not avoid the call for action. Let's not avoid the need to slow down a bit and let the supply chain catch up.'
Interestingly, Calhoun took the helm at Boeing after the ouster of his predecessor Dennis Muilenburg in 2020. Muilenburg struggled to handle the crisis that cropped up following two 737 Max crashes.
Following the Alaska Airlines flight incident, America's Federal Aviation Administration halted Boeing's planned expansion of 737 Max jet production. The FAA refused to entertain any requests for a reversal of this order pending the regulator's satisfaction 'that the quality control issues uncovered during this process are resolved.'
The Air India Boeing 787 Dreamliner crash in Ahmedabad is likely to increase the scrutiny on Boeing, according to Morgan Stanley analyst Kristine Liwag. While the best case scenario for Boeing's stock is that the crash may have occurred due to a pilot error, the worst-case scenario could be a system issue, the analyst said, giving a share price target of $200 apiece.
RBC Capital analyst Ken Herbert maintained an 'outperform' rating on Boeing's stock with a share price target of $230 apiece. While the implications of the Air India flight crash are yet to be known, they are likely to overshadow Boeing's prospects ahead of the Paris air show.
Under current CEO Ortberg, Boeing has embarked on a cost-cutting drive. However, he would not hesitate to add personnel at its defense and commercial aircraft unit, Ortberg said during Boeing's annual general meeting in April.
Boeing was engulfed in a controversy brought by a former employee turned whistleblower John Barnett, who was found dead in 2024. The former quality manager at Boeing's North Charleston plant, which built the 787 Dreamliner, retired in 2017 citing health grounds. He alleged later that the workers at the facility were under pressure to fit sub-standard parts to the jets on the production line, the BBC reported. This was done to prevent production delays, he said.
He flagged problems with the jet's oxygen systems indicating that one in four breathing masks may fail during an emergency.
Since then, several whistleblower's have come forward to flag safety concerns on Boeing jets.
In a June 2024 US Senate hearing, Senator's said Boeing under Calhoun faced a 'moment of reckoning' besides being accused of strip mining the company.
'You're cutting corners, you're eliminating safety procedures, you're sticking it to your employees,' Republican senator Josh Hawley said to Calhoun during the hearing.