Boeing's dismal year is drawing to a close with the most devastating aviation catastrophe of 2024.
Boeing's dismal year is drawing to a close with the most devastating aviation catastrophe of 2024.
The crash's origins remain unclear, and the probe might drag on for several months. As of now, there's no indication that Boeing's production process is to blame.
Boeing communicated their sympathy and readiness to aid Jeju Air following the crash of flight 2216. They conveyed their condolences to the families who suffered a tragic loss and continued to think about the passengers and crew.
Although it's uncertain whether this tragedy is Boeing's fault, the company has had a challenging year filled with both humiliating and distressing incidents. In contrast to the Jeju crash, most of these issues could be traced back to Boeing.
Boeing's stocks plummeted by about a third this year according to closing figures on Monday after the crash. Adding to this, the CEO and other key executives were removed from their positions. The endless flow of negative headlines sparked serious concerns regarding Boeing's capacity to rectify its safety and quality issues.
Alaska Air incident
The ordeal started with a door fitting dislodging from a 737 Max airliner operated by Alaska Airlines shortly after it took off from Portland, Oregon. Passengers' belongings together with their mobile phones were swept from the plane through a large hole that formed in the fuselage as the cabin air rushed out.
Luckily, no serious injuries were reported among the passengers, who eventually landed safely minutes later. However, a preliminary analysis by the National Transportation Safety Board revealed that the plane left Boeing's factory lacking the essential bolts needed to secure the door fitting.
Prior to the incidence on January 6, the plane had completed 153 flights, including trans-Pacific journeys between Hawaii and the U.S. mainland. Presumably, the door fitting might have failed on an earlier flight that might have led to a catastrophic accident.
The incident triggered numerous investigations by not just the NTSB, but also by Congress, the Federal Aviation Administration, and the Justice Department. The FBI contacted those on board, informing them they could potentially be considered victims of a crime. The FAA's investigation led to enhanced monitoring of Boeing by the agency, consisting of limits on the number of planes Boeing could produce. Furthermore, the FAA delayed possible certification of two new versions of the Max that Boeing had planned to distribute to clients this year.
The investigations and hearings brought testimonies from numerous Boeing whistleblowers, who spoke on the company's quality and aircraft-building procedures, as well as the priority of speed over safety and retaliation against staff who complained. Boeing argued it had implemented measures to improve quality and safety, and to encourage employees to report any issues.
Criminal charge
The Alaska Air incident reopened the possibility of Boeing facing criminal prosecution following an agreement reached three years earlier. In July, Boeing agreed to plead guilty to federal charges that it had misled the FAA during the initial certification process for the 737 Max. As part of the agreement, Boeing agreed to pay up to $487 million in fines, double what it had paid under a 2021 deferred prosecution agreement.
The most damaging consequence for Boeing was the agreement to be subjected to oversight by a government-appointed monitor.
However, in October, a federal judge rejected the plea, citing concerns about selecting the government-appointed monitor, leaving the ultimate penalty still uncertain.
Stranded astronauts
In June, Boeing finally launched a crewed mission with its Starliner spacecraft, taking NASA astronauts Butch Wilmore and Suni Williams to the International Space Station.
The mission represented a significant reversal following years of development and test flight challenges that left it far behind the rival SpaceX Dragon spacecraft in carrying astronauts to the ISS.
Regrettably, the success was short-lived: Not long after Starliner's arrival, NASA revealed that helium leaks and thruster malfunctions meant it wouldn't be safe to have Starliner return the two astronauts to Earth as originally planned.
The spacecraft ultimately returned to Earth without its passengers, and Wilmore and Williams are still waiting for a SpaceX Dragon to take them back to Earth sometime in early 2025. As of now, it's unclear when Boeing's Starliner will be able to carry astronauts again and fulfill its contract with NASA.
Crippling strike
In September, 33,000 trade union members from the International Association of Machinists initiated a strike that halted production of the 737 Max and the company's freighter aircraft. Union members had overwhelmingly rejected a tentative agreement reached between the company and union leadership about a week prior.
Many union members remained angry over the loss of a traditional pension plan a decade earlier and stuck to the strike for nearly two months. They eventually accepted a fourth offer, which included an immediate 13% raise and increases of 9% for the following two years, then another 7% in the fourth and final year of the agreement. Combined, this raised hourly wages by 43% over the contract's lifetime.
Beyond the cost of the new labor deal, the strike was the most expensive American strike of the 21st century, costing the company, its workers, and its suppliers more than $11.5 billion according to Anderson Economic Group, a Michigan research firm with expertise in estimating the cost of work stoppages. And it took Boeing about a month to resume production once the strike had ended.
During the strike, Boeing declared it needed to eliminate 10% of its worldwide workforce consisting of 171,000 employees, as a part of financial saving measures to reduce losses moving forward.
Racking up deficits
In October, Boeing reported one of its most financially disastrous quarters ever, with its core operating loss escalating to an astronomical $6 billion in the third quarter, indicating a substantial annual loss upcoming, surpassing the deficit incurred during 2020 when both the Max grounding and the Covid-19 pandemic triggered significant losses across the global airline sector.
The exorbitant losses weren't solely due to the strike, which only impacted the final two weeks of the period. It also involved a $3 billion pre-tax penalty due to additional setbacks in its upcoming generation commercial jet, the 777X, which experienced complications during test flights and now will not be delivered to customers until 2026.
Boeing forecasted that losses could persist through 2025 as it endeavors to restore production to profitable levels. Since early 2019, Boeing has sustained losses totalling $39.3 billion, following the second fatal crash of its main passenger jet, the 737 Max, resulting in a 20-month halt of the aircraft's operation. Economically, Boeing has incurred losses almost every quarter since then, and its credit rating is teetering on the brink of being downgraded to junk bond status for the first time in its history.
Jeju Air Incident
Boeing's financial year concluded on a sour note. The Jeju Air airplane's landing gear showed no signs of extension as it attempted to land. It is believed that a bird strike forced the aircraft's pilots to issue a distress call as it approached the airport in Muan, South Korea.
The plane was a 737-800, known for its impressive safety record compared to its successor model, the 737 Max, which has had numerous issues, including fatal crashes in 2018 and 2019 that claimed the lives of 347 individuals, occasioning a 20-month halt to remedy a design flaw.
According to Boeing's records, the 737-800 has had one of the lowest rates of fatal crashes in the industry, given its flight frequency. A 15-year-old aircraft like the one involved in the Jeju Air incident is less likely to face issues caused by design flaws or production problems attributable to Boeing. However, the cause of why the Jeju Air plane's landing gear failed to extend remains unclear at this time.
Despite the ongoing investigation into the Jeju Air incident, there have been concerns about Boeing's business operations. The company has been dealing with a challenging year marked by various humiliating and distressing incidents, many of which can be traced back to Boeing.
Following the crash of flight 2216, Boeing faced significant setbacks. Its stocks plummeted by about a third, prompting the removal of key executives from their positions. The endless flow of negative headlines raised concerns about Boeing's capacity to rectify its safety and quality issues.