The crash of Jeju Air Flight 2216, which claimed the lives of 179 out of 181 passengers aboard a Boeing 737-800, has placed the American aircraft manufacturer under scrutiny, despite the model’s reputation as a reliable and well-established aircraft. The tragedy occurred during the landing approach at Muan Airport, and its causes are currently under investigation. Jeju Air confirmed that the aircraft underwent standard technical inspections prior to departure, highlighting the unexpected nature of the accident. Boeing extended its condolences to the victims’ families and pledged to support the investigation.
The Boeing 737-800, introduced in the late 1990s, is a widely used aircraft known for its reliability. However, any crash involving a Boeing aircraft tends to affect investor sentiment, which has reflected in the company’s stock performance. On Friday, Boeing’s shares closed at $180.72, marking a 28.22% decline in value for the year. Meanwhile, Jeju Air’s stock dropped by 8.65% on Monday on the South Korean stock exchange. The accident is also expected to influence Boeing’s stock performance in upcoming U.S. trading sessions.
The crash adds to a challenging period for Boeing, which has been grappling with significant issues for some time. Earlier in 2024, defects in the doors of the 737 MAX model prompted production restrictions imposed by the Federal Aviation Administration (FAA). Additionally, a seven-week strike by mechanics increased operational costs and disrupted delivery schedules. The company is still reeling from the impact of two 737 MAX crashes in 2018–2019, which resulted in billions of dollars in losses and undermined customer and market confidence. In response to these challenges, Boeing introduced leadership changes and quality and safety improvement programs in August 2024. However, Sunday’s tragedy threatens to derail these efforts.
The crash in South Korea raises questions about whether this was an isolated incident or indicative of deeper systemic problems within Boeing. Although the accident did not involve the 737 MAX—a model previously plagued by crises—rebuilding trust in the brand remains a formidable task. Investors and the aviation industry are closely watching how Boeing will navigate growing competition from Airbus and maintain high safety standards. The outcome of the investigation into the causes of the crash will likely have significant implications for the company’s future actions. Boeing’s recently introduced safety and quality programs will now undergo intense scrutiny, and the company’s ability to reassure customers and investors of its aircraft’s reliability will determine its future trajectory.
Author: Krzysztof Kamiński, Oanda TMS Brokers
Source: CEO
