The hits just keep coming for Boeing. Boeing announced on Thursday, July 18, 2019, that it was setting aside $5.6 billion to cover the costs of compensating airlines that have had grounded flights because of the international and prolonged grounding of its 737 MAX planes. Tha amount covers the contractual damages. Still ahead, the litigation from the families of the 346 victims of the two crashes of the 737 MAX. This hit means a loss for the quarter, and a loss that is equal to about 25% of the company’s anticipated $20-billion revenue this year.
Looking back at the series of events, one wonders whether the grounding would have lasted as long and as many orders would have been canceled or delayed if Boeing’s contrition had come sooner. The initial resistance to admission and grounding not only delayed the fix, but allowed distrust to fester among customers, passengers, and regulators. From there we can leap back to the design of the plane — unintended expeditious route to beating Airbus in the market. That too is lost as it looks as if Airbus will become the dominant player in commercial aircraft. So many lessons, strategically, managerially, and ethically.