Further Bad News For Boeing

It’s fair to say that Boeing hasn’t been having a good time lately. There has been a lot of focus on the company and more precisely, a lot of scrutiny on the safety of their aircraft. This was due to two crashed planes which unfortunately killed hundreds of people.

Their 737 Max jet crashed in Indonesia in October which at the time was seemingly written off as an unconnected accident and there wasn’t much thought to grounding the aircraft. When there was another crash in Ethiopia back in March, that all changed.

Since that crash, the aircraft has been grounded as Boeing work to make sure that the accident never happens again. In that time the company’s reputation has taken a few huge blows and their share price has struggled to remain stable too.

Reputation Damage

This change in reputation has been shown by the fact an airline has cancelled its order with the company. Flyadeal were due to receive 30 of the aircraft from Boeing but have since gone back on that order.

Boeing released a statement to say that the reneging of the deal was due to scheduling requirements but there must have been a lot of scepticism from Flyadeal as to whether or not the aeroplanes that they were ordering were going to be safe.

There was the option for the company to add 20 more the 737 Max planes to their fleet and the whole deal would have been worth around $5.9bn. It’s a huge amount of money to lose out on as the low-cost airline will instead look to Airbus for their needs.

Software Upgrade

The problem with the 737 Max has been pinpointed to the control system and Boeing has ever since been working on a software upgrade. As the planes are structurally sound, you expect that the company is going to be able to recover.

This was seen by IAG’s intention to buy 200 of these aircraft. It shows that plenty of the industry still have faith in their safety once Boeing is given the all-clear from the regulators. Until they are, they’ll be hoping for no more bad news.