Boeing (BA) shares climbed early this week following the release of a preliminary report into the fatal crash of Air India Flight 171, which left over 250 dead.
The findings — while tragic — brought relief to investors by pointing to pilot confusion and a mechanical fuel cutoff, rather than a systemic design flaw.
Boeing shares edged higher Monday, reflecting cautious optimism after a preliminary report into the June 12 crash of Air India Flight 171 concluded the aircraft’s engines lost thrust due to a sudden and unexplained fuel cutoff. The report, filed by India’s Aircraft Accident Investigation Bureau (AAIB), indicated that both engine fuel switches were flipped from “RUN” to “CUTOFF” just seconds after takeoff, without a clear explanation.
Cockpit recordings captured one pilot questioning the move, with the other responding that he hadn’t touched the switches. Both were quickly restored to their original positions, but not fast enough to prevent the crash.
The Boeing 787 involved, powered by GE Aerospace (GE) GENx engines, plunged into a residential area in Ahmedabad, killing 241 onboard and 19 people on the ground.
FAA Steps In, Eases Regulatory Concerns
Despite the grim details, the U.S. Federal Aviation Administration (FAA) concluded over the weekend that the locking mechanisms on the 787’s fuel switches remain safe — echoing a 2018 FAA bulletin that recommended, but did not require, inspections of the switches across several Boeing models.
This assessment helped ease concerns of a broad regulatory backlash or grounding similar to the 737 MAX crisis. No mandatory directives have been issued, and the Indian report included no calls for changes to aircraft systems, a fact seen by analysts as a key factor supporting Boeing’s stock.
India and South Korea have nonetheless initiated precautionary checks on similar Boeing models. While these investigations raise the stakes in critical global markets, early indications from airline inspections — including those by Air India — show no systemic flaws.
Despite the grim details, the U.S. Federal Aviation Administration (FAA) concluded over the weekend that the locking mechanisms on the 787’s fuel switches remain safe — echoing a 2018 FAA bulletin that recommended, but did not require, inspections of the switches across several Boeing models.
This assessment helped ease concerns of a broad regulatory backlash or grounding similar to the 737 MAX crisis. No mandatory directives have been issued, and the Indian report included no calls for changes to aircraft systems, a fact seen by analysts as a key factor supporting Boeing’s stock.
India and South Korea have nonetheless initiated precautionary checks on similar Boeing models. While these investigations raise the stakes in critical global markets, early indications from airline inspections — including those by Air India — show no systemic flaws.
Investor Sentiment Rebounds on Clearer Outlook
Boeing shares, which had dropped below $200 in the aftermath of the crash, have rallied more than 6% since, reaching a new intraday 52-week high of $233 on Monday. Analyst sentiment is turning positive. Bernstein lifted its price target for Boeing to $282, citing progress in production and a reduced risk of regulatory fallout.
The 787 program, which includes around 1,190 aircraft globally, is essential to Boeing’s long-haul strategy. With Qatar Airways recently ordering up to 130 additional Dreamliners, and production now stabilized at five units per month, the potential for further growth looks strong.
The absence of mandated inspections, combined with a reaffirmation of component safety, allows Boeing to focus on delivery schedules and capturing rising demand for widebody jets — particularly as airlines rebuild their fleets with fuel-efficient aircraft.
A Tragic Crash, but No Fatal Blow to Boeing’s Outlook
While the Air India tragedy has prompted intense scrutiny, the early verdict from regulators has avoided immediate damage to Boeing’s 787 program. That’s good news for investors wary of another prolonged crisis. With orders returning and safety concerns being managed, Boeing appears to have a clear runway — even as it awaits final answers from the ongoing investigation, expected later this year.
For now, the market is betting that Boeing can keep its momentum aloft.
Boeing shares, which had dropped below $200 in the aftermath of the crash, have rallied more than 6% since, reaching a new intraday 52-week high of $233 on Monday. Analyst sentiment is turning positive. Bernstein lifted its price target for Boeing to $282, citing progress in production and a reduced risk of regulatory fallout.
The 787 program, which includes around 1,190 aircraft globally, is essential to Boeing’s long-haul strategy. With Qatar Airways recently ordering up to 130 additional Dreamliners, and production now stabilized at five units per month, the potential for further growth looks strong.
The absence of mandated inspections, combined with a reaffirmation of component safety, allows Boeing to focus on delivery schedules and capturing rising demand for widebody jets — particularly as airlines rebuild their fleets with fuel-efficient aircraft.
A Tragic Crash, but No Fatal Blow to Boeing’s Outlook
While the Air India tragedy has prompted intense scrutiny, the early verdict from regulators has avoided immediate damage to Boeing’s 787 program. That’s good news for investors wary of another prolonged crisis. With orders returning and safety concerns being managed, Boeing appears to have a clear runway — even as it awaits final answers from the ongoing investigation, expected later this year.
For now, the market is betting that Boeing can keep its momentum aloft.
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