Boeing Faces Shareholders Lawsuit
Boeing has been sued by shareholders who say the company prioritized profit over safety and misled them about its commitment to making safe aircraft, prior to the mid-air incident on January 5th when a cabin panel blowout on an Alaskan Airlines 737 MAX 9.
A proposed class action lawsuit filed today claims that Boeing spent more than four years after the October 2018 and March 2019 crashes of two other MAX planes, which killed 346 people, assuring investors that it was “laser-focused” on aircraft safety and would not sacrifice safety for profit.
The lawsuit alleges serious safety lapses at Boeing and false and misleading statements or omissions to the market concerning those safety lapses. In particular, on January 5, 2024, Alaska Airlines Flight 1282 was diverted back to Portland, Oregon after a door plug (a panel installed to replace an optional emergency exit door) on the Boeing 737 MAX 9 aircraft blew out and caused an uncontrolled decompression of the aircraft shortly after takeoff.
On January 8, 2024, United Airlines disclosed that personnel had found loose bolts during inspections on an undisclosed number of grounded aircraft and Alaska Airlines also announced that their inspections found “loose hardware” on some aircraft. Following these disclosures, Boeing’s stock price plummeted from $249.00 on January 5, 2024 to $200.52 on January 16, 2024, a $48.48 or 19.5% decline.
More recently, the FAA approved a thorough inspection and maintenance process that must be performed on each of the grounded 171 Boeing 737-9 MAX aircraft. But the agency said it will not allow any production expansion of the MAX, including the 737-9 MAX. This action comes on top of the FAA’s investigation and ramped up oversight of Boeing and its suppliers.
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.
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