Boeing shares drop nearly 5% after Air India crash

Boeing's stock price fell by almost 5 per cent on Thursday, after an Air India flight crashed in the Indian city of Ahmedabad.

The plane, a Boeing 787 Dreamliner that had 242 people on board and was bound for London's Gatwick Airport, crashed shortly after take-off.

According to air traffic control at the airport in Ahmedabad, the plane took off at 1.39pm (12.09pm UAE) from runway 23. It gave a “mayday” call, signalling an emergency but there was no response after that.

Boeing president Kelly Ortberg said that he has spoken with Air India chairman Natarajan Chandrasekaran to offer the company full support, adding that Boeing "stands ready" to support the investigation being led by India’s Aircraft Accident Investigation Bureau.

"Our deepest condolences go out to the loved ones of the passengers and crew on board Air India Flight 171, as well as everyone affected in Ahmedabad," Mr Ortberg said.

Boeing said it would defer to the AAIB to provide information about Air India Flight 171.

The company's shares closed 4.79 per cent lower at $203.75 on Thursday after falling as much as 8 per cent during pre-market trading.

Thursday's crash comes as the US plane maker is already trying to regain the trust of its airline customers after a series of safety setbacks in recent years.

While aviation authorities are still investigating the cause of the Air India crash, analysts believe this will be a test for Boeing, given recent accidents involving its aircraft. However, this is the first time a Boeing 787 Dreamliner has crashed.

"Today's tragedy comes just as Boeing thought it had put its problems behind it," Chris Beauchamp, analyst at UK-based IG Group, told The National.

"And to make matters worse, from an investment perspective, the 787 is its flagship airliner, in demand around the globe. It changes the entire narrative around the company, back to the introspective mood that prevailed after previous crashes."

This is also perhaps the first real challenge for Mr Ortberg, as he is about to finish a year at the helm, Mr Beauchamp added.

Saj Ahmad, chief analyst at StrategicAero Research, said it was "too premature to speculate" over the reason for the Air India crash.

"But it would suffice to say, airlines have been steadily regaining faith and trust in Boeing under its new leadership with Kelly Ortberg," he told The National.

"Goodwill is not going to go away on the back of this crash, particularly as airlines and customers will be seeking answers as to why this happened in the first place and what can be done to prevent such an event happening again."

His views were echoed by Kapil Kaul, chief executive and director, Capa India, a specialist aviation advisory and research business.

"The Indian aviation sector has maintained a strong safety record, and it is important to recognise that it is too early to ascertain the reasons for this crash since potential causes may range from technical to operational factors, including the impact of bird strikes," Mr Kaul told The National.

Until Thursday’s crash the Dreamliner had maintained a strong safety record. There had been 171 incidents involving technical issues and glitches for the 787, according to data compiled by Aviation Safety Network. Indian airlines account for 14 of those.

Boeing’s other aircraft, however, have figured in a number of accidents, the most recent of which were crashes in 2018 and 2019, involving Indonesia’s Lion Air and Ethiopian Airlines, respectively, resulting in the deaths of 346 people.

With the Air India crash, a total of 107 crashes have involved Boeing jets, according to industry tracker 1001Crash.com.

Air India has ramped up its fleet expansion under Tata Group, the Indian conglomerate that acquired the airline in 2022.

At the 2023 Paris Airshow, Air India placed an order for 220 Boeing jets, including 190 737-Max aircraft, 20 Dreamliners and 10 of its 777X jets, in addition to signing options for another 50 737-Max jets and 20 787s.

That was part of a broader 470 aircraft order alongside a 250-jet purchase from Boeing’s European rival Airbus, which was worth $70 billion at that time.

"Since privatisation, Air India has invested significantly in structurally enhancing the airline’s air safety regime and maintains a relatively younger fleet – underscoring the importance of a thorough investigation into this accident," Mr Kaul said.

The Air India aircraft involved in Thursday's deadly crash made its first flight on December 14, 2023, according to aviation data company Cirium. The aircraft, which is 11.5 years old and was manufactured in Seattle, was delivered to the Indian carrier on January 28, 2014.

It had more than 41,000 hours of flying time, and nearly 8,000 take-offs and landings, including some 700 cycles in the past 12 months, which is average for that aircraft build year/period, Cirium data showed.