The DOJ Launches Criminal Investigation Into The Boeing 737 Max Incident

The United States Department of Justice (DOJ) is reportedly opening a criminal investigation into the door plug incident that occurred on Alaska Airlines Flight 1282, a Boeing (NYSE:BA) 737 Max aircraft, back in January 2024.

Boeing has sought to rehabilitate its reputation as an airliner following a malfunction that was suffered by its new line of Max jets on January 5, 2024. The incident saw a door plug blow out while the plane was in mid-air. Fortunately, the incident resulted in no fatalities. However, passengers were understandably distressed.

The Boeing Max jetliners had suffered two previous crashes, in 2018 and 2019, that resulted in all passengers and crew on board losing their lives. Lion Air Flight 610 on October 29, 2018, and Ethiopian Airlines Flight 302 on March 10, 2019. Regulators grounded the airliners after the incidents.

Reports indicate that the DOJ will investigate whether Boeing has complied with the terms of the 2021 settlement that followed the fatal crashes in 2018 and 2019. The DOJ had charged Boeing with“a conspiracy to defraud the Federal Aviation Administration Aircraft Evaluation Group”. Investors will want to watch the investigation closely as Boeing's reputation will be on the line.

Shares of Boeing have plunged 21% so far in 2024 as of close on Friday, March 8. That has pushed the stock into negative territory in the year-over-year period. While this investigation is troubling, Boeing remains a powerhouse as an airline manufacturer and one of the largest defense contractors on the planet. The stock looks undervalued compared to its peers at the time of this writing

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