Shareholders sue Boeing following MAX 9 blowout

(Reuters) — Boeing Co. has been sued by shareholders who said the company prioritized profit over safety and misled them about its commitment to making safe aircraft, prior to the Jan. 5 mid-air cabin panel blowout on an Alaskan Airlines 737 MAX 9.

According to a proposed class action filed Tuesday, Boeing spent more than four years after the October 2018 and March 2019 crashes of two other MAX planes, which killed 346 people, assuring investors that it was “laser-focused” on safety and would not sacrifice safety for profit.

Shareholders said Boeing’s statements were false and misleading because they concealed the “poor quality control” on its assembly line and caused its stock price to be inflated.

Boeing’s share price fell 18.9% from Jan. 5 to Jan. 25, wiping out more than $28 billion of market value.

A Boeing spokesman declined to comment Wednesday.

The lawsuit, filed in federal court in Alexandria, Virginia, covers shareholders from Oct. 23, 2019, to Jan. 24, 2024, and is led by Rhode Island General Treasurer James Diossa.

Other defendants include Boeing CEO Dave Calhoun and his predecessor Dennis Muilenburg, and Chief Financial Officer Brian West and his predecessor Gregory Smith.

The Jan. 5 blowout caused the FAA to temporarily ground 171 MAX 9 planes, resulting in thousands of flight cancellations at Alaska Air Group and United Airlines. 

No one died on the Alaska Air flight, but some passengers have sued Boeing and the airline.