737 MAX Crisis: Can Boeing Bounce Back?

Case Code: OPER152
Case Length: 10 Pages
Period: 2010-2020
Pub Date: 2021
Teaching Note: Available
Price: Rs.400
Organization : -
Industry : Aerospace & Defense
Countries : United States
Themes: Quality Management & Improvement, Operations Management , Quality Management & Improvement
Global Economic Impact of Coronavirus – Assessment and Mitigation (B)
Abstract Case Intro 1 Case Intro 2 Excerpts


The Boeing 737 Family

The Boeing 737 was initially developed for short-range travel with the 737-100 aircraft which made its first flight in April 1967 and entered service in February 1968 with Lufthansa. After a few months – in April 1968, the extended version, the 737-200, entered service. To capture the aircraft market further, Boeing launched a few more versions during the 1980s – the 737-300, -400, and -500 variants featuring updated CFM56 turbofan engines and wing improvements for improved range. During the 1990s, Boeing continued its success by introducing the Boeing 737 NG, which had a larger wingspan and a redesigned cockpit with updated interiors..

Maneuvering Characteristics Augmentation System (MCAS)

An airplane stall is an aerodynamic state at which an aircraft surpasses its given critical angle of attack. At this position, the wings will no longer be able to produce the required lift for a normal flight. The angle of attack of an aerofoil is measured by the angle between the chord line (i.e., the imaginary line from the leading edge to the trailing edge of the wing) and the relative wind. Usually, at a high angle of attack, the pilot needs to interfere to reduce it, which in turn brings the nose of the aircraft down, helping to avoid a stall condition..

The Accidents

As of January 31, 2019, Boeing had 5,011 firm orders from 79 identified customers for the 737 MAX. One of the top airline customers for the 737 MAX was Lion Air from Indonesia with 201 orders..

Boeing’s Reaction

After the crash of the Lion Airline aircraft, Boeing expressed regret for the loss of life but did not elaborate on a possible link with the mistake in the design of the aircraft. But the report released by the investigation committee constituted by Lion Air pinpointed the MCAS system and its dependency on a single malfunctioning sensor as the main reason for the crash..

What went wrong?

Boeing wanted to press the 737 MAX into service at the earliest to compete with the Airbus SE. But it encountered unexpected delays while finalizing the positioning of engines, which in turn, led to issues with the aircraft’s flight control systems. To reduce the time required for the 737 MAX to enter service, Boeing took a few shortcuts which were legal as per the type certification process of FAA..

The Consequences

According to the results declared on January 29, 2020, Boeing announced its first annual loss since 1997. The loss was attributed to the 737 Max crisis. Boeing had put the total cost of the 737 MAX crisis at $18.6 billion as on the day it announced the results..

The Road Ahead

Boeing had a challenging task ahead. It had to bring back the 737 MAX into operation quickly to avoid mounting losses. In addition, it had to convince its customers about the safety of the aircraft as well as the company’s systems and processes. A more challenging task was rebuilding its reputation among the stakeholders. It was not clear how long this would take..


Exhibit 1: Engine position of Airbus A320 Neo against 737 MAX Engine Position
Exhibit 2: Engine Shape Modified to Oval Shape to Increase Ground Clearance
Exhibit 3: New Engine Position for 737 MAX
Exhibit 4: Engine was Larger for 737 MAX
Exhibit 5: Definition of Angle of Attack
Exhibit 6: Trend – Boeing Stock Price

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