Boeing’s recent safety incidents, including the midair blowout on an Alaska Airlines Boeing Max 9 plane in January, have significant consumer and market implications. According to an SEC filing, Alaska Airlines reported losing approximately $160 million in their first quarter as a result of the blowout and grounding. The airline’s losses included lost revenues, costs due to irregular operations, and costs associated with restoring their fleet to operational service.
Boeing provided an initial compensation of $160 million in cash to address these losses, with the airline expecting additional compensation from Boeing in the future. The incident led to thousands of flight cancellations and highlighted Boeing’s production pressures and delays leading up to it.
Mike Boyd, President of Boyd Group International, and CFRA deputy research director Stewart Glickman recently discussed the implications of this incident for consumers and the market. They noted that the incident has led to increased scrutiny of Boeing’s safety record and raised concerns about the potential for future accidents. Additionally, they pointed out that the incident has had a significant impact on consumer confidence in air travel and may lead to increased regulation of the aviation industry.
The midair blowout incident on January 5 occurred when the door plug on a 737-9 MAX plane detached just minutes after takeoff, causing the cabin to depressurize and resulting in damage to the aircraft and passengers. The Federal Aviation Administration (FAA) grounded similar Boeing 737 Max 9 jetliners for inspections following the incident, which resulted in thousands of flight cancellations.
