After two crashes and the grounding of 737 MAX aircraft around the world, Boeing has come forward with an apology and a commitment to resolve fatal software issues in its new jets.
The 737 MAX is currently Boeing’s most important product. The recent crashes and subsequent groundings in the U.S. and other nations have put a damper on the company’s otherwise strong stock.
Boeing (NYSE: BA) expects to soon fix a software issue that contributed to the crashes.
Boeing CEO Releases Statement on 737 MAX Crashes
In a company press release and video address on Thursday, CEO Dennis Muilenburg said that “We at Boeing are sorry for the lives lost in the recent 737 MAX accidents. These tragedies continue to weigh heavily on our hearts and minds, and we extend our sympathies to the loved ones of the passengers and crew on board Lion Air Flight 610 and Ethiopian Airlines Flight 302.”
Boeing’s statement comes almost six months after the first 737 MAX accident. Boeing believes that it has now identified a software problem that contributed to both accidents.
The CEO did not release detailed information about either crash, instead leaving government authorities to issue the final reports. He did reveal that “it’s apparent that in both flights the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information.”
The statement also indicated that pilots have been aware of errors with the MCAS system, saying that “erroneous activation of the MCAS function can add to what is already a high workload environment. It’s our responsibility to eliminate this risk. We own it and we know how to do it.”
Boeing claims that additional training and an update to the MCAS system will prevent any similar accidents from “ever happening again.”
Stock is Recovering with Renewed Confidence
Boeing stock suffered heavily when the second 737 MAX crash occurred. Before the accidents, this model was driving Boeing’s bottom line. Over 30 days, stock has declined -6.31%.
However, prices are now beginning to recover, with investors confident that Boeing will get planes back in the air in the coming weeks.
Boeing’s stock is still up 22.75% year-to-date, outperforming the S&P 500 index by a significant margin.
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