Boeing had a tough week last week. Its defense union on Friday rejected its latest contract proposal. CEO Kelly Ortberg on Thursday warned about certification delays for its 777X. The result drove shares back below their 10-week moving average for the first time since April.
Now, the Dow Jones manufacturer faces fines from the FAA regarding safety violations. And two new reports detail potential issues with the company's aircraft. Boeing shares have eased to start the week.
The Federal Aviation Administration seeks $3.1 million in fines from Boeing regarding safety violations from September 2023 through February 2024, the regulator announced on Friday. The fines include actions related to the Jan. 5, 2024 door plug blowout incident on an Alaska Airlines Boeing 737 flight.
The FAA said it identified hundreds of quality system violations at Boeing's 737 factory in Renton, Washington, as well as its subcontractor Spirit AeroSystems' 737 factory in Wichita, Kansas. Boeing also presented two unairworthy planes to the FAA for airworthiness certificates and failed to follow its quality system, the regulator said.
Furthermore, the FAA found that one Boeing employee pressured a member of Boeing's Organization Designation Authorization unit to sign off on a 737-Max plane to meet its delivery schedule, despite the ODA member determining the aircraft did not comply with applicable standards. Boeing's ODA program allows Boeing employees to perform certain safety-related tasks. Those tasks include inspections and engineering approvals on behalf of the FAA.
The regulator used its max statutory civil penalty authority. Boeing has 30 days to respond to the FAA's penalty letters.
Aircraft Fumes Report
Elsewhere, the Wall Street Journal on Saturday released a report about toxic fumes leaking into airplanes. The leaks have led to harmful health side effects for passengers and crew.
There have been thousands of fume events reported to the FAA since 2010, WSJ reported. In these instances, toxic fumes from a jet's engines will leak unfiltered into the cockpit or cabin.
Most modern commercial jets, except for the Boeing 787, use a system called "bleed air." That system diverts air from engine for other functions, like cabin pressurization or air conditioning. The rate of these leak incidents accelerated in recent years, according to the WSJ, largely driven by Airbus' A320 family of jets.
Airbus and Boeing have both acknowledged that malfunctions can cause oil and hydraulic fluid to leak into the engines or power units and vaporize. That can release neurotoxins, carbon monoxide and other chemicals into the air. However, aircraft manufacturers and their airline customers have largely downplayed risks, successfully lobbied against safety measures, and made cost-saving changes that increase risk to passengers and crew, according to the WSJ.
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Manufacturers, regulators and airlines have said that fume incidents are too infrequent, contamination levels are too low, and health risk data is inconclusive to require a complete fix.
Still, the leaks can cause harmful effects on the health of passengers and crew. Susan Michaelis, a former pilot interviewed by the WSJ who has passed since publication, developed cancer due to oil leaks in the BAE Systems BAe146 plane. Florence Chesson, a JetBlue flight attendant, developed a traumatic brain injury with permanent damage due to the fumes she inhaled. One neurologist likened it to a chemical concussion, similar to a brain injury suffered by NFL players after a hard hit.
Potential Dreamliner Mechanical Issue
Elsewhere, Mike Andrews, a lawyer representing the families of the victims from the Boeing Air India crash in June, claimed technical issues were likely the cause of the crash — not pilot error.
Only one of the 242 passengers and crew on board Air India flight AI171 survived the June crash, while 19 victims on the ground were killed. The Boeing 787 Dreamliner took off from Ahmedabad in western India and was bound for London, but lost power less than two minutes into the flight and crashed into a medical building.
The preliminary investigation found that the fuel control switches had been flipped from "RUN" to "CUTOFF," which starved the engines of fuel. Audio from the cockpit indicates that one pilot asked why the switch had been flipped. The co-pilot responded that he did not do so.
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Andrews, in an interview with the U.K. tabloid The Independent, suggested a technical issue was the cause of the crash, rather than error or self-sabotage. The 787 has had problems involving its potable water system and its proximity to electronics, according to Andrews. The FAA previously raised alarms over water leaks. He cited Boeing bulletins to airlines dating back to 2016 about the need to perform waterproofing maintenance.
Andrews said that some of the equipment joining water lines has been known to lead to leaks, which dripped down into electrical equipment bays. Some instances required replacements, according to the interview. The electronics equipment bay also houses the full authority digital engine control (Fadec), which is a computer that helps regulate engine thrust, fuel injection and performance.
Andrews made clear the importance of waiting for the full evidence before drawing conclusions. A preliminary report from India's Aircraft Accident Investigation Bureau pointed to pilot error, but was not conclusive.
If the Fadec fails the engine fails, according to the FAA. And even small leaks could trigger a reset, Andrews asserted, which could lead to a temporary engine shutdown. The U.S. regulator on May 14 also issued a warning about potential water leak risks, just weeks before the crash.
Boeing Stock
BA shares eased less than 1% Tuesday, adding to a slight decline Monday. The stock slumped almost 6% last week, its worst week since April, falling out of a flat base and breaking technical support at its 10-week moving average.
Shares of the Dow Jones manufacturer are up 21% in 2025.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
