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What Effect Ahmedabad Air Crash Effects on Boeing’s Market Valuation

Image Source: Unsplash

The international aviation industry is once again facing intense scrutiny related to Boeing, following the tragic crash of an Air India Boeing 787-8 Dreamliner in Ahmedabad, India, on June 12, 2025.

The disaster occurred shortly after the plane took off from Sardar Vallabhbhai Patel International Airport, en route to London Gatwick. With 242 people on board and no survivors, the tragedy has sent shockwaves through the market, leading to an 8% drop in Boeing’s stock price.

This incident has intensified the focus on the aerospace giant, which continues to navigate the fallout from previous high-profile disasters and persistent quality control issues.

First Fatal Crash of a Dreamliner Air India Flight AI 171, a Boeing 787-8 Dreamliner, went down in a residential area just five minutes after its 1:38 PM local departure. Preliminary reports indicate that the aircraft issued a “MAYDAY” call shortly after takeoff but failed to respond to further communications from air traffic control.

This incident marks the first fatal accident involving a Boeing 787 Dreamliner since its introduction in 2009, a model praised for its advanced composite materials and fuel efficiency. Following the tragedy, emergency responders were deployed, and India’s Civil Aviation Minister, Ram Mohan Naidu Kinjarapu, expressed deep condolences while promising swift action and support for those affected. Air India confirmed the details and stated they were working to gather more information.

The crash has raised serious concerns, particularly given the 787 Dreamliner’s history of technical issues, such as hydraulic leaks, flap malfunctions, and manufacturing shortcuts flagged by whistleblowers, including former Boeing engineer Sam Salehpour. These problems have led to previous temporary groundings and delays in deliveries as regulatory bodies examined the aircraft’s structural integrity and quality assurance.

The Boeing 737 MAX Crisis. The Air India incident comes at a time when Boeing is still working to restore its reputation following the devastating 737 MAX crisis. In an earlier disaster, a 737 MAX 8 fell into the Java Sea minutes after leaving Jakarta, resulting in the deaths of all 189 passengers. Another 737 MAX 8, Ethiopian Airlines Flight 302, crashed just six minutes after takeoff from Addis Ababa, killing all 157 aboard. Investigations into these tragedies revealed issues with a flight control system called the Maneuvering Characteristics Augmentation System (MCAS), which, in an attempt to prevent stalls, erroneously forced the aircraft’s nose downward based on flawed sensor data, leading to a battle for control by the pilots.

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In January 2024, an Alaska Airlines Boeing 737 MAX 9 experienced a mid-flight door plug failure, causing rapid cabin depressurization. Investigations found missing bolts, raising alarming questions about Boeing’s quality control during production. Reports from March 2024 highlighted that Boeing did not pass nearly three dozen audits conducted by the FAA, sparking a criminal investigation by the U.S. Department of Justice into the corporation. Additionally, Boeing “voluntarily” disclosed potential incomplete inspections on certain 787 Dreamliners concerning electrical safety measures at the junction of the wings and fuselage, leading to a mandated action plan to rectify these issues in aircraft already in operation.

Image Source: Unsplash

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