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Boeing's Net Trust Plummets Following Recent 737 Max 9 Issues
Ticker Tea
January 30, 2024
📝 SUMMARY: Boeing ($BA) has experienced a notable downturn in its reputation this month, as indicated by a Morning Consult survey. The survey reveals that Boeing's net trust among U.S. adults fell 12 percentage points from December 2023 to January 2024, a substantial shift in public perception. This metric measures the proportion of people who trust the brand minus those who do not. The decline in trust was also observed among frequent flyers and business travelers, though to a lesser extent.
This erosion of trust follows an incident on January 5, where a door plug blew off a Boeing 737 Max 9 operated by Alaska Airlines ($ALK). Interestingly, the incident did not similarly affect the reputations of Alaska Airlines or United Airlines ($UAL), which also reported loose bolts on its 737 Max 9s.
Boeing's response, articulated by Commercial Airplanes CEO Stanley Deal, acknowledged the disruption caused to airline customers and expressed a commitment to rectifying the issues. Despite this, Boeing's reputation has faced more severe challenges in the past, particularly following the crashes of two Max 8s in 2018 and 2019, which saw net trust among U.S. adults dip below 6%.
Since 2020, Boeing has gradually rebuilt trust, led primarily by confidence from high-dollar investors. Typically, Americans have shown a greater net trust in Boeing compared to its main competitor, the European-based Airbus. However, for the second time in five years, U.S. respondents this month expressed more confidence in Airbus.
Morning Consult's Joanna Piacenza anticipates further, albeit less severe, decreases in Boeing's net trust metrics as the brand continues to feature in news headlines. However, the impact is not expected to reach the levels seen in March 2019, given the absence of fatalities in the recent incident.
Following the grounding of approximately 170 Max 9s, the FAA has now allowed planes passing inspections to fly again. Airlines such as Alaska Airlines, United Airlines, and Copa Airlines have resumed operations with the aircraft.
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