India crash is fresh setback in Boeing’s bid to restore reputation
As hundreds lie dead following the latest tragedy to beset a Boeing passenger plane, it is too early to determine blame.
Pilot error, engine failure and bird strikes are among the theories all being banded about. Only the recovery of Flight AI171‘s black box flight recorders are likely to provide the concrete answers.
What is inescapable though is that this is an air disaster the plane’s maker, Boeing, could well do without.
Plane crash latest: 53 Britons on board
It sounds petty, in the midst of such a catastrophe, to be talking about the impact on a company, but this has been a civil aviation giant left deeply scarred, in the public eye, through its attitude to safety in recent years.
While the 787 Dreamliner’s record had been impressive up until today, the same can not be said for the company’s 737 MAX planes.
The entire fleet was grounded globally for almost two years following the demise of Ethiopian Airlines Flight 302 outside Addis Ababa in March 2019.
Women mourn next to the coffins of relatives who died in the Ethiopian Airlines crash in 2019. Pic: Reuters
All 157 people aboard were killed.
Six months earlier, a Lion Air 737 MAX, carrying 189 passengers and crew, crashed in Indonesia.
At fault was flight control software that has since been rectified.
That recent past continues to haunt Boeing.
It took those crashes to uncover a culture of cover-up. It amounted to not only a corporate failure but one of regulation and justice too, according to critics, as relatives were denied their days in court due to plea bargains.
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What happened to the Air India plane?
Just last month, the US Justice Department and Boeing agreed a non-prosecution agreement over those two fatal crashes in return for $1.1bn in fines and an admission that it obstructed the investigation.
It raises several questions over the US legal system and its ability to police corporate activity and incentivise playing by the rules.
Would a British manufacturer have been offered such a deal by US prosecutors?
As for regulation, we’re told oversight has been stepped up and the number of planes that Boeing makes is still subject to controls in a bid to boost quality.
The company has long denied putting profit before safety, but that is what almost every whistleblower to have come forward to date has alleged.
The production limits were implemented after a mid-air door plug blowout aboard an Alaska Airlines Boeing 737 MAX 9 flight in January last year.
They are hampering Boeing’s efforts to restore profitability.
Read more:
Air India plane ripped apart medical hostel
What we know so far about AI171 crash
A 5% fall in its share price at the market open on Wall Street goes to the heart of Boeing’s problem.
That is every time a Boeing plane is involved in an accident or failure, investors’ first instincts are to run for the hills.
Boeing says it is seeking more information on the nature of the Air India crash.
But whether Boeing’s plane is at fault for the loss of Flight 171 or not – and we have seen nothing so far to indicate that was the case – it’s clear the company has a long way to go to restore trust.
In a statement, Boeing president and chief executive Kelly Ortberg, said: “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.
“I have spoken with Air India chairman N. Chandrasekaran to offer our full support, and a Boeing team stands ready to support the investigation led by India’s Aircraft Accident Investigation Bureau (AAIB).”
Boeing will defer to India’s AAIB to provide information about Air India Flight 171, in adherence with the United Nations International Civil Aviation Organization protocol, the company added.
Business
‘Knock-back for London’ as AstraZeneca sells shares directly on rival New York Stock Exchange
One of the UK’s most valuable listed companies is to sell its shares directly on the rival New York Stock Exchange, in a move described as a “knock back for London”.
While AstraZeneca will maintain its headquarters in the UK and its primary stock listing on the London Stock Exchange, the news can be seen as a move away from London.
“Although there has been no suggestion that AstraZeneca is imminently going to up sticks and move its primary listing from London, there may be some nervousness this morning around the risk that the UK market might lose one of its largest constituents,” said Russ Mould, the investment director of investment platform AJ Bell.
Read more:
AstraZeneca exit is a frightening prospect for the City and the government
The news “does at least hint at the possibility of a more dramatic shift at some point in the future”, Mr Mould said.
There may also be relief that AstraZeneca is not moving from the London Stock Exchange altogether.
“I think there is probably relief that it’s not pursuing a primary listing in New York, but the decision is hardly a ringing endorsement of London,” said Neil Wilson, the UK investor strategist at investment platform Saxo Markets.
“It reflects the fundamental, structural issues in the UK for the largest globally-oriented stocks – the depth and liquidity of its capital markets is falling short of what’s on offer across the pond.”
“It’s also a bit of a knock-back for London”, Mr Wilson said.
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Why is the UK economy so volatile?
Why is this happening?
The Cambridge-based pharmaceutical company said the decision to sell shares directly on the New York Stock Exchange – rather than the previous less straightforward system of using American depository receipts – has been made to allow it “to reach a broader mix of global investors” and “make it even more attractive for all our shareholders”.
“The US has the world’s largest and most liquid public markets by capitalisation, and the largest pool of innovative biopharma companies and investors,” the company said in an announcement to investors.
AstraZeneca’s share price was up 0.7% on the news.
Jaguar Land Rover (JLR) has announced it will partially resume manufacturing “in the coming days” after nearly a month in the wake of a cyber attack.
The luxury car-making plants have paused production since 31 August. The cyber attack halted car-making across the supply chain, with staff off work as a result.
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More than 33,000 people work directly for JLR in the UK, many of whom are on assembly lines in the West Midlands, with the largest facility located in Solihull, and a plant in Halewood on Merseyside.
Roughly 200,000 more are employed by several hundred companies in the supply chain, who rely on JLR orders as their biggest client.
“As the controlled, phased restart of our operations continues, we are taking further steps towards our recovery and the return to manufacture of our world-class vehicles,” a company spokesperson said.
The shutdown was said to last until at least 1 October.
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Are we in a cyber attack ‘epidemic’?
“Today we are informing colleagues, retailers and suppliers that some sections of our manufacturing operations will resume in the coming days,” the company added, days on from the partial restart of its IT systems, which allowed supplier payments to recommence.
“We know there is much more to do, but the foundational work of our recovery is firmly underway, and we will continue to provide updates as we progress.”
Over the weekend, the government said it would underwrite a £1.5bn five-year loan guarantee to JLR.
The promise came as the head of the influential Business and Trade Committee of MPs wrote to Chancellor Rachel Reeves, warning small firms reliant on JLR, “may have at best a week of cashflow left to support themselves” with “urgent” action needed to support businesses.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that’ve struggled in the past year with such attacks.
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