Boeing: The 737 MAX Crisis

Abstract

After two fatal crashes of Boeing 737 MAX aircraft within five months, killing all 346 people aboard both planes, the Chicago-based U.S. aviation giant Boeing Co. was faced with a major crisis. In March 2019, aviation authorities around the world grounded the Boeing 737 MAX passenger airliner. Public trust in Boeing had fallen to its lowest point in its over 100 years’ of storied history. However, the way Boeing and its top management handled the crisis has led to distrust and disappointment with both the public and stakeholders. The belated response by its CEO Dennis Muilenburg, the company’s reluctance to shoulder responsibilities, and inconsistent public statements all have contributed to a deepening lack of confidence in Boeing.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

You are not authorized to view Teaching Notes. Please contact your librarian for instructor access or sign in to your existing instructor profile.

Resources

Exhibit 1: Updated: Boeing Statement on Ethiopian Airlines Flight 302

“March 10, 2019 – Boeing is deeply saddened to learn of the passing of the passengers and crew on Ethiopian Airlines Flight 302, a 737 MAX 8 airplane. We extend our heartfelt sympathies to the families and loved ones of the passengers and crew on board and stand ready to support the Ethiopian Airlines team. A Boeing technical team will be travelling to the crash site to provide technical assistance under the direction of the Ethiopia Accident Investigation Bureau and U.S. National Transportation Safety Board.”

Source: Boeing, 2019.

Exhibit 2: Letter From Boeing CEO Dennis Muilenburg to Airlines, Passengers and the Aviation Community

“CHICAGO, March 18, 2019/PRNewswire/—

We know lives depend on the work we do, and our teams embrace that responsibility with a deep sense of commitment every day. Our purpose at Boeing is to bring family, friends and loved ones together with our commercial airplanes—safely. The tragic losses of Ethiopian Airlines Flight 302 and Lion Air Flight 610 affect us all, uniting people and nations in shared grief for all those in mourning. Our hearts are heavy, and we continue to extend our deepest sympathies to the loved ones of the passengers and crew on board.

Safety is at the core of who we are at Boeing, and ensuring safe and reliable travel on our airplanes is an enduring value and our absolute commitment to everyone. This overarching focus on safety spans and binds together our entire global aerospace industry and communities. We’re united with our airline customers, international regulators and government authorities in our efforts to support the most recent investigation, understand the facts of what happened and help prevent future tragedies. Based on facts from the Lion Air Flight 610 accident and emerging data as it becomes available from the Ethiopian Airlines Flight 302 accident, we’re taking actions to fully ensure the safety of the 737 MAX. We also understand and regret the challenges for our customers and the flying public caused by the fleet’s grounding.

Work is progressing thoroughly and rapidly to learn more about the Ethiopian Airlines accident and understand the information from the airplane’s cockpit voice and flight data recorders. Our team is on-site with investigators to support the investigation and provide technical expertise. The Ethiopia Accident Investigation Bureau will determine when and how it’s appropriate to release additional details.

Boeing has been in the business of aviation safety for more than 100 years, and we’ll continue providing the best products, training and support to our global airline customers and pilots. This is an ongoing and relentless commitment to make safe airplanes even safer. Soon we’ll release a software update and related pilot training for the 737 MAX that will address concerns discovered in the aftermath of the Lion Air Flight 610 accident. We’ve been working in full cooperation with the U.S. Federal Aviation Administration, the Department of Transportation and the National Transportation Safety Board on all issues relating to both the Lion Air and the Ethiopian Airlines accidents since the Lion Air accident occurred in October last year.

Our entire team is devoted to the quality and safety of the aircraft we design, produce and support. I’ve dedicated my entire career to Boeing, working shoulder to shoulder with our amazing people and customers for more than three decades, and I personally share their deep sense of commitment. Recently, I spent time with our team members at our 737 production facility in Renton, Wash., and once again saw firsthand the pride our people feel in their work and the pain we’re all experiencing in light of these tragedies. The importance of our work demands the utmost integrity and excellence—that’s what I see in our team, and we’ll never rest in pursuit of it.

Our mission is to connect people and nations, protect freedom, explore our world and the vastness of space, and inspire the next generation of aerospace dreamers and doers—and we’ll fulfill that mission only by upholding and living our values. That’s what safety means to us. Together, we’ll keep working to earn and keep the trust people have placed in Boeing.

Dennis Muilenburg

Chairman, President and CEO

The Boeing Company”

Source: Boeing, 2019.

Exhibit 3: Boeing CEO Dennis Muilenburg Addresses the Ethiopian Airlines Flight 302 Preliminary Report

“CHICAGO, April 4, 2019/PRNewswire/—

We at Boeing are sorry for the lives lost in the recent 737 MAX accidents. These tragedies continue to weigh heavily on our hearts and minds, and we extend our sympathies to the loved ones of the passengers and crew on board Lion Air Flight 610 and Ethiopian Airlines Flight 302. All of us feel the immense gravity of these events across our company and recognize the devastation of the families and friends of the loved ones who perished.

The full details of what happened in the two accidents will be issued by the government authorities in the final reports, but, with the release of the preliminary report of the Ethiopian Airlines Flight 302 accident investigation, it’s apparent that in both flights the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information.

The history of our industry shows most accidents are caused by a chain of events. This again is the case here, and we know we can break one of those chain links in these two accidents. As pilots have told us, erroneous activation of the MCAS function can add to what is already a high workload environment. It’s our responsibility to eliminate this risk. We own it and we know how to do it.

From the days immediately following the Lion Air accident, we’ve had teams of our top engineers and technical experts working tirelessly in collaboration with the Federal Aviation Administration and our customers to finalize and implement a software update that will ensure accidents like that of Lion Air Flight 610 and Ethiopian Airlines Flight 302 never happen again.

We’re taking a comprehensive, disciplined approach, and taking the time, to get the software update right. We’re nearing completion and anticipate its certification and implementation on the 737 MAX fleet worldwide in the weeks ahead. We regret the impact the grounding has had on our airline customers and their passengers.

This update, along with the associated training and additional educational materials that pilots want in the wake of these accidents, will eliminate the possibility of unintended MCAS activation and prevent an MCAS-related accident from ever happening again.

We at Boeing take the responsibility to build and deliver airplanes to our airline customers and to the flying public that are safe to fly, and can be safely flown by every single one of the professional and dedicated pilots all around the world. This is what we do at Boeing.

We remain confident in the fundamental safety of the 737 MAX. All who fly on it—the passengers, flight attendants and pilots, including our own families and friends—deserve our best. When the MAX returns to the skies with the software changes to the MCAS function, it will be among the safest airplanes ever to fly.

We’ve always been relentlessly focused on safety and always will be. It’s at the very core of who we are at Boeing. And we know we can always be better. Our team is determined to keep improving on safety in partnership with the global aerospace industry and broader community. It’s this shared sense of responsibility for the safety of flight that spans and binds us all together.

I cannot remember a more heart-wrenching time in my career with this great company. When I started at Boeing more than three decades ago, our amazing people inspired me. I see how they dedicate their lives and extraordinary talents to connect, protect, explore and inspire the world—safely. And that purpose and mission has only grown stronger over the years.

We know lives depend on the work we do and that demands the utmost integrity and excellence in how we do it. With a deep sense of duty, we embrace the responsibility of designing, building and supporting the safest airplanes in the skies. We know every person who steps aboard one of our airplanes places their trust in us.

Together, we’ll do everything possible to earn and re-earn that trust and confidence from our customers and the flying public in the weeks and months ahead.

Again, we’re deeply saddened by and are sorry for the pain these accidents have caused worldwide. Everyone affected has our deepest sympathies.

Dennis Muilenburg

Chairman, President & CEO

The Boeing Company”

Source: Boeing, 2019.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles