'Fuselage Hole' Boeing Stock Drops 20%... Doubts Persist Despite Hiring Special Advisor

Stock Price Drops After Accident... Lowest in 2 Months
Calls for Boeing Management Resignation Grow Louder

Boeing 737 Max [Image source=Yonhap News]

Boeing, the manufacturer of the Boeing 737 Max model involved in an incident where part of the fuselage was punctured during flight, has taken measures such as hiring a special advisor and reinforcing its technical team.

According to major foreign media on the 16th (local time), Boeing appointed retired U.S. Navy Admiral Kirkland H. Donald as a special advisor to Boeing CEO Dave Calhoun on the same day. Advisor Donald is expected to lead an external expert team to evaluate Boeing's commercial aircraft and supply chain quality practices. Through this, he will provide recommendations to CEO Calhoun and the board of directors.

Boeing also requested Ireland's low-cost airline Ryanair to dispatch engineers to oversee aircraft quality management. Ryanair is one of the largest customers of Boeing Max aircraft. Previously, Boeing announced plans to conduct additional quality inspections on the model after the incident and to send inspection teams to suppliers that manufactured the problematic parts.

Boeing's announcement of additional reinspection measures regarding aircraft quality comes after concerns about quality and safety issues with a Boeing 737 Max 9 aircraft operated by Alaska Airlines on the 5th remained unresolved. Moreover, this model has a painful history of two crashes in 2018 and 2019, resulting in a total of 346 fatalities. Following the fuselage incident, the U.S. Federal Aviation Administration (FAA) announced on the 7th a suspension of operations for 171 aircraft of the same model, and on the 12th, extended this suspension indefinitely.

Some critics argue that Boeing has not presented effective measures to prevent recurrence since the incident. For example, there are concerns that retired Admiral Donald, appointed as special advisor, has no direct professional connection to aviation. This is why calls for the resignation of Boeing's management are expected to grow louder.

First, the results to be released on the 17th by aviation and transportation authorities such as the FAA and the National Transportation Safety Board (NTSB), which have launched investigations against Boeing, are expected to be a turning point determining the fate of the Boeing 737 Max model. On that day, the authorities plan to report the investigation results to U.S. senators.

Boeing's stock price has been continuously declining since the incident. The stock price fell by 20% up to this day, marking the lowest point in over two months since November 10 of last year. On the same day, global investment bank Wells Fargo downgraded its investment rating on Boeing from "buy" to "neutral" and lowered the target price from $280 to $225, resulting in an 8% drop at closing.