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Operational Risk

Boeing 737 Max crisis- Operational Risk Case Study 

By  Rahul Kapoor
Updated On
Boeing 737 Max crisis- Operational Risk Case Study 


The Boeing 737 Max passenger airliner was grounded worldwide between March 2019 and December 2020 & even longer in many jurisdictions, after 346 people died in two similar crashes: Lion Air Flight 610 on October 29, 2018, and Ethiopian Airlines Flight 302 on March 10, 2019. 

The U.S. Federal Aviation Administration (FAA) resisted grounding the aircraft until March 13, 2019, when it received evidence of accident similarities. By then, 51 other regulators had already grounded the plane, and by March 18, 2019, all 387 of the aircraft in service were grounded. 

Boeing 737 Max Crisis & Operational Risk Analysis

Two significant operational failures were attributed to “MCAS Software Design”, “Inadequate Pilot Training and Communication” and “Certification and Regulatory Oversight”.  

 A brief insight into these risk factors has been provided as follows:  

MCAS Software Design

The Manoeuvring Characteristics Augmentation System (MCAS) was implemented in the Boeing 737 Max to address the aircraft’s tendency to pitch up under certain conditions. The MCAS system relied on data from a single angle-of-attack (AOA) sensor, which measures the aircraft’s angle relative to the oncoming air. If the AOA sensor provided erroneous data, the MCAS system could erroneously activate, repeatedly pushing the nose of the aircraft down.  

Inadequate Pilot Training and Communication 

The training provided to pilots operating the Boeing 737 Max did not adequately cover the MCAS system and its potential failure modes. Boeing did not disclose the existence of the MCAS system to airlines or pilots, which prevented pilots from being aware of its operation and how to respond to unexpected activations. 

Certification and Regulatory Oversight

The crisis raised questions about the certification process and regulatory oversight of the Boeing 737 Max. It was revealed that the Federal Aviation Administration (FAA) had delegated some of the certification responsibilities to Boeing itself, under the FAA’s Organization Designation Authorization (ODA) program. This raised concerns about potential conflicts of interest and the adequacy of oversight by regulators. 

Impact and Consequences  

Loss of Lives and Damage to Reputation  

The crashes resulted in the tragic loss of 346 lives, leading to immense human suffering. The incidents also severely damaged Boeing’s reputation as a leading aircraft manufacturer and raised concerns about the safety of the Boeing 737 Max. This serves to be a Classic example of where Unmanaged Operational risk leads to Reputational risk.

Grounding of Aircraft  

In response to the crashes, aviation regulators around the world grounded the Boeing 737 Max fleet. The grounding lasted for several months, causing disruptions to flight schedules and financial losses for airlines. It also resulted in significant financial and operational impacts for Boeing and its suppliers. 

Boeing faced numerous lawsuits from victims’ families, shareholders, and airlines affected by the grounding. The company also incurred substantial financial losses related to compensation, settlements, and the cost of implementing software updates and safety enhancements.  

Key Learnings  

A few of the key Learnings are as follows,

Safety Culture and Ethical Practices 

The crisis highlighted the critical importance of fostering a strong safety culture within organizations. Companies must prioritize safety over commercial considerations and ensure ethical practices are followed throughout the organization. This includes transparent communication, timely reporting of safety concerns, and a commitment to continuous improvement in safety processes.  

Design and System Redundancy 

The Boeing 737 Max crisis emphasized the need for thorough system design and redundancy to mitigate the risks associated with single points of failure. Aircraft systems should be designed with multiple layers of redundancy and fail-safe mechanisms to prevent accidents caused by the failure of a single component or system. Redundancy should also extend to critical sensors to ensure accurate and reliable data inputs.  

Communication and Transparency 

         The crisis exposed the need for transparent communication among aircraft manufacturers, regulators, airlines, and pilots. Critical information related to aircraft systems, design changes, and potential safety risks should be effectively communicated to all stakeholders. Manufacturers should proactively disclose relevant information, and regulators should ensure that airlines and pilots have access to accurate, up-to-date information on aircraft systems and procedures. 

Training and Awareness 

The crisis underscored the importance of comprehensive and continuous pilot training. Pilots need to be well informed about all critical systems and potential failure modes, including those related to automated systems. Training programs should be comprehensive, covering normal and emergency procedures, and provide pilots with the knowledge and skills to handle unexpected events and system failures effectively.  

Organizational Accountability and Responsibility 

The crisis emphasized the need for organizational accountability and responsibility. Companies must prioritize safety as a core value and ensure that safety considerations are integrated into all aspects of their operations. This includes implementing rigorous risk assessment processes, promoting a culture of reporting and addressing safety concerns, and holding individuals and organizations accountable for their actions or failures that compromise safety.  

Continuous Improvement and Learning 

The Boeing 737 Max crisis highlighted the importance of continuous improvement and learning in the aviation industry. Companies should actively seek feedback, monitor safety performance, and conduct thorough investigations of incidents and near-misses. Lessons learned should be shared across the industry, leading to the implementation of necessary changes and improvements to enhance safety systems and processes continually. 


The Boeing 737 Max crisis serves as a cautionary case study, highlighting the importance of robust system design, transparent communication, comprehensive pilot training, regulatory oversight, and ethical practices in the aviation industry. 

The incident prompted a reassessment of safety procedures, certification processes, and industry-wide collaboration to prevent similar crises in the future.

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