Boeing sued by shareholders following mid-air MAX 9 blowout
Boeing (BA.N) has been sued by shareholders who said the company prioritized profit over safety and misled them about its commitment to making safe aircraft, prior to the Jan. 5 mid-air cabin panel blowout on an Alaskan Airlines 737 MAX 9.
According to a proposed class action filed on Tuesday, Boeing spent more than four years after the Oct. 2018 and March 2019 crashes of two other MAX planes, which killed 346 people, assuring investors that it was “laser-focused” on safety and would not sacrifice safety for profit.
Shareholders said Boeing’s statements were false and misleading because they concealed the “poor quality control” on its assembly line, and caused its stock price to be inflated.
Boeing’s share price fell 18.9% from Jan. 5 to Jan. 25, 2024, the day after the Federal Aviation Commission barred Boeing from expanding MAX production because of safety concerns.
The decline wiped out more than $28 billion of market value.
A Boeing spokesman declined to comment on Wednesday.
The lawsuit filed in the Alexandria, Virginia, federal court covers shareholders from Oct. 23, 2019 to Jan. 24, 2024, and is led by Rhode Island General Treasurer James Diossa.
Other defendants include Boeing Chief Executive Dave Calhoun and his predecessor Dennis Muilenburg, and Chief Financial Officer Brian West and his predecessor Gregory Smith.
“This case has the potential to effect changes in Boeing’s practices to protect passengers and ensure their safety in the future,” Diossa said in a statement.
Catch up on Boeing's ongoing airplane fiasco
Boeing has recently been plagued by safety concerns that began Jan. 5 after a door panel blew off a Boeing 737 MAX 9 jet during a flight from Oregon to California. According to the National Transportation Safety Board, the plane — which was operated by Alaska Airlines — appeared to be missing four key bolts.
Scott Kirby, CEO of United Airlines, threatened to shun Boeing after the carrier’s fleet of MAX 9 aircraft was grounded in the wake of the near-disastrous Alaska Airlines door blowout.
Jennifer Homendy, chair of the National Transportation Safety Board, warned that another midair door blowout like the Boeing 737 MAX 9 fiasco “can happen again,” adding there was a “problem with the process” of production.
Disaster struck again a week after the initial incident when a Boeing plane was forced to make an emergency landing in Japan due to a crack in the cockpit window.
A Boeing 757 lost its front tire as the aircraft was preparing to depart for an international flight in late January. At Atlanta International Airport, a Delta flight bound for Bogota, Colombia, was taxiing across the runway into takeoff position when another plane alerted the control tower that something was amiss.
Later, a UK passenger was alarmed after noticing pieces of tape on the exterior of a Boeing 787 during a flight to India, as seen in shocking photos.
A United Airlines Boeing 777-300 aircraft suffered a midair fuel leak and was forced to make an emergency landing Monday, March 11, marking the fifth incident the airline reported in a little over a week.
Ryanair CEO Michael O’Leary previously said he’s made “loud complaints” to Boeing over quality control.
Whistleblower John Barnett raised safety concerns at the airline’s factories and provided his first testimony at a bombshell lawsuit against Boeing. He was found dead in his truck after he failed to show up for the second part of his testimony on Monday.
The Jan. 5 blowout caused the FAA to temporarily ground 171 MAX 9 planes, resulting in thousands of flight cancellations at Alaska Air Group (ALK.N), and United Airlines (UAL.O).
No one died on the Alaska flight, but some passengers have sued Boeing and the carrier.
On Wednesday, Boeing said it couldn’t provide full-year financial targets because of uncertainty over its planes.
It also reported better-than-expected fourth-quarter results, which included a $30 million loss, $22 billion of revenue and $3.38 billion of cash flow.
The case is State of Rhode Island Office of the General Treasurer v Boeing Co et al, U.S. District Court, Eastern District of Virginia, No. 24-00151.
