Where Did Boeing Go Wrong?
Thirty-two hours after an Ethiopian Airlines 737 Max crashed on takeoff from Addis Ababa, killing all 157 aboard, shares of the plane’s manufacturer, Boeing, traced a similar trajectory, dropping 12 percent at the opening bell of the New York Stock Exchange and never fully recovering.
While the cause of the Ethiopian incident hasn’t yet been established, it makes sense that investors would lose confidence in Boeing: The crash came just five months after another involving a 737 Max in Indonesia, Lion Air Flight 610, and the dual disasters have spooked airlines and the traveling public. Erring on the side of caution, China and Indonesia have grounded the 737 Max, and 25 individual carriers have done so as well, including Ethiopian and Cayman Airways.*
The 737 Max first flew just two years ago, and some 350 are now in service. For such a new type of aircraft to suffer two fatal crashes is extraordinarily unusual, and bad. While the investigation into the Lion Air crash is still underway, a preliminary report suggests that the pilots failed to respond correctly after a faulty sensor led the autopilot to put the plane into a steep dive. We know even less about what happened to the Ethiopian flight. But no matter the causes, the mere fact that a single type of aircraft has had two accidents in swift succession raises questions about the trustworthiness of its manufacturer. Boeing has heretofore enjoyed a sterling reputation; its most recent all-new design, the 787, has never had a fatality, and the one before that, the 777, went 18 years without one. So it’s worth asking: How did Boeing find itself suddenly in this reputational shitstorm?