Boeing has been dealt a blow it will be recoiling from for some time. In just six months, its new 737 Max 8 model, the latest instalment to Boeing’s narrow-body range, has suffered two devastating accidents. The first crash took place in October, as a Lion Air jet went down over the Indian Ocean, costing the lives of 189 people. Just under a month ago, a second 737 Max 8, this time Ethiopian Airlines, suffered an accident minutes after take-off. In total 350 lives were lost in the two accidents, and the future of America’s premier aerospace manufacturer now looks increasingly uncertain
Historically, aviation accidents can spell the end for airliners and their operators. Take the Concord for example; amongst other issues plaguing the super-sonic airliner, Air France Flight 4590 put the nail in the coffin for the model. In the case of Flight 4590, it was not a manufacturing fault, rather a piece of debris on the runway that brought down the plane in Paris. Yet, given the high-stakes industry, that was enough to spell the end for an airliner with an immaculate flight-record. In a similar vein, the accidents suffered just months apart by Malaysian in 2014 sent the operator in to freefall. Again, through no manufacturing or operating fault of their own. In fact, a military BUK missile brought down one of the planes. Irrespective of the technicalities of the incidents, trust in the industry is fragile and once it is lost it is near impossible to win back. Malaysian prices dropped week-on-week after its incidents and brought the company to near bankruptcy. It was only bailed out by the government of Malaysia because it is a symbol of national pride, an asset of the people. And still, it has been reduced to a regional airliner, a fraction of its former self, unable to shake the reputational damage it was dealt.
Returning to the case of Boeing, which faces Senate hearings and investigations by the FAA, the hill looks like a much steeper climb. What we know so far, from voluntary aircraft incident reports provided by a NASA database, is that an autopilot system failure caused the plane to often suddenly nose down after take-off. In short, this looks like a manufacturing fault and one for which Boeing carries responsibility. In light of the industry track-record, the 737 Max 8 is likely to be grounded for more than just a few weeks. With $40bn lost in market valuation since beginning of crisis, and orders being cancelled or clients move over to Airbus for the A320 model, Boeing faces an existential crisis. How it handles its communications from now on, whether it takes responsibility for the accidents, and how it appeases the concerns of an anxious market, will be critical to its future.
Ripples of this 737 Max crises are being felt far beyond the Boeing HQ. The crisis reaches as far as the White House. Trump is an ally of Boeing, with a top Boeing exec serving as his defence secretary. In fact, Boeing fosters bipartisanship amongst the American polity. Republicans and Democrats alike are lax on regulating one of America’s largest manufacturers. The FAA, in turn, is lax on regulating the safety standards of its jets, with Boeing having extensive say in the safety evaluations of its own aircraft. The vested interests of Washington are most clearly demonstrated by the unwillingness of Trump to ground the aircraft, whilst most of the world already had, and admit that there a real issue that needed addressing. Given the vested interests of Senators and Execs throughout Washington, it is unlikely we will see Boeing go under, however, a political fallout is imminent.