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  • Writer's pictureKupa Aerospace

Has bad decisions ever been more costly?

Updated: Jul 31, 2019



4,9 billion USD. That is what Boeing has set aside as compensation for their customers and their loss of revenue. Boeing also states their pre-tax earnings will drop 5,6 billion USD in one quarter alone. Lower output rate will cost additional 1,7 USD.

This is known costs so far. They don’t include money for a number of unsettled lawsuits. They don’t include possible losses due to cancellations of orders or renegotiations for rock-bottom prices. They don’t include uncertainties regarding the re-introduction of the aircraft and they don’t include brand name damage.

The known numbers above are staggering by themselves. Converted to SEK they amount to approx. 114 miljarder SEK. To wrap your brain around a number like that – just imagine you spend 1 million SEK per day – you will have to do that for just over 312 years before you run out of money.

The name of the plane might also have to be changed to yield for public sentiment that the proud MAX addition is not the most popular. All in all it is a tragedy that the worlds leading aircraft manufacturer has ended up in dire straits. The inevitable ”crash investigation” will most likely be cruel. Heads will roll (some have already) both at Boeing and the FAA. There must have been numerous meetings where decisions have been governed by economy rather than max (no pun intended) safety. But how do you blame a whole industry that has let low-cost airlines fooled passengers that safe flights cost peanuts, bringing economy to such a squeeze that plane makers must cut corners -too.

On a positive note, who remembers the Volkswagen scandal some years ago? Boeing will, as the industry has always done when something has gone terribly wrong, bring all its considerable talent, minus what has been rooted out, to bear on re-introducing the quite possibly safest aircraft ever, and most likely, a few years from now, not many people will remember this, unless they think about it, which nobody likes to do anyway. Especially not when you board a plane.

This might have been one injection out of many the industry needed. Sadly only after loss of life. Money talks but lack of money talks louder.

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