9.

PESTLE Analysis of Boeing

Boeing being one of the most powerful players in the aviation industry, its business is
affected by wide range of factors

Political:

Political and regulatory environment is not the same across all the nations. These regulations
affect the sales and business of Boeing. While air travel has grown in popularity, the level of
regulation in some countries is still a hindrance to profitable business. Boeing’s aircrafts and
cargo aircrafts are known for their excellence. However, until the relationship between the
governments and the industry is very friendly, the hurdles would remain. As per a report by
‘Open Secrets’ Boeing’s lobbying expenditure in 2016 was $3,980,000. All these facts
indicate towards the remarkable importance of the political factors in case of Boeing. Post
crisis the lobbying expenditure may help them in their future.

Economical:

The model 737 Max was made on the factor of economical returns for the companies, and
give them marginal profits at lower costs, but due to recent events the company is facing
severe allegations with the flaw in their engine. This would lead to loss of trust in their
engines by the aviation companies and may even switch to rival engine (Airbus).

This may lead to significant loss in their revenue in the short run, until they come up with
reliable product, and would loose their market share to competitor.

Social:

Socially, the acceptance of air travel has increased. Now, more and more people are using air
travel for tourism and professional travelling. Moreover, air travel is the preferred mode of
transportation for the millennial generation. In the developed nations particularly, its demand
is very high which is very good for Boeing. This demand is expected to rise further in future
based on increased reliance on airlines. With increasing acceptance rate, this issue could lead
to decline in not only manufacturers (Boeing) sales also it would lead to less reliance on the
airline, which in-turn could lead to Airbus gaining popularity among the other airlines,
gradually Boeing loosing its popularity and market share.
Technological:

Technology has become central to growth in the airlines industry. This may be only the
competing factor, and if executed rightly. Apart from that, Boeing spends a lot on research
and development to make its aircrafts safer and better in terms of fuel efficiency and other
features. The main reason that Boeing is ahead of all is its ability of technological innovation.
It conducts a lot of research before developing its mind blowing models. In the 21st century,
technology has acquired a central role in transportation. Faster planes that are low on fuel
consumption and environmental impact will continue to remain in demand.

Legal Implication:

Victims of the plane crash, who are now seeking legal action against Boeing for wrongful
death, and most of the passengers are not US citizens, their case would be fought in U.S.
federal court, which is considered to be one of the most liberal jurisdiction when it comes to
money damages in civil lawsuit. If acquitted, they would be liable for 364 wrongful deaths
and a huge monetary fine.

Environmental:

Boeing is committed to the protection of the environment and the planet. It has invested in
several areas related to environment and fuel efficiency. It is developing and testing new
technologies that can bring greater fuel efficiency. It also sets environmental performance
targets for its facilities and works to meet them. Boeing notes, “From researching biofuels,
fuel cells and hybrid electric propulsion to improving air traffic management, finding
sustainable composite materials and exploring new chemical coatings that resist corrosion,
our team of technicians, technologists, engineers and scientists collaborate with research and
development partners around the world to solve today and tomorrow’s environmental
challenges”. As a part of its remediation program, Boeing is taking innovative approaches in
clean up efforts to protect human health and the environment.

Individual opinion

In a Tit for Tat situation, Boeing came up with its new model is response to airbus, without
any proper training for pilots and no proper information provided to them regarding the
changes made (MCAS), they just sold the engine/model on the claim that it is going to be fuel
efficient, even though they have enough resources and money to train the pilots and give
them a clear picture of the model and its functioning, they refrained from doing so.

Although from the report it was clear that the issue lied with Boeing, the way the top
management handled the situation was not right as they denied any allegation on the fault
with MCAS and the model. They were not transparent with any of the information during the
crisis and they blamed the event on a “chain of events” with “no singular cause”.

Ownership was not taken by them at any stage, even though it was clear from the reports that
commonality between the two crashes was due to MCAS, and they even mentioned in the
report that they were coming up with an “software update” for MCAS.

Situation managed by Boeing was “classic tug of war between managing a crisis with an eye
in the court of law versus the court of public opinion”, and they have swung too much into
the court of law, which may tarnish their image among the customers.

References
Kaiser, R. J. (n.d.). robertjkaiser. Retrieved from
https://www.robertjkaiser.com/blog/2019/march/legal-implications-of-the-recent-boeing-
737-max-/

News18. (n.d.). Retrieved from News18.com: https://www.news18.com/news/auto/a-simple-we-are-

responsible-could-have-helped-boeing-solve-the-737-max-8-crisis-analysis-2134535.html