Boeing's 787 Crossroads: Crash Investigation Could Sink or Swim the Stock

The Air India Flight 171 disaster on June 12, 2025, which claimed 274 lives, has thrust Boeing's 787 Dreamliner into a storm of scrutiny. With the investigation zeroing in on engine fuel control switches and potential power system failures, investors are grappling with a critical question: Does this mark the end of the Dreamliner's dominance—or a temporary setback in a market still desperate for long-haul jets? Let's dive into the chaos and parse the investment angles.

The Air India Crash: A Wake-Up Call for Boeing?

The preliminary report from India's Aircraft Accident Investigation Bureau (AAIB) highlights the engine fuel control switches as a key area of focus. While the black box data hasn't yet confirmed whether these switches malfunctioned or were tampered with, the mere suspicion has rattled investor confidence. The dual-engine failure—a rare event given the Dreamliner's design—has opened the door to questions about Boeing's engineering rigor.

The AAIB noted that the engines' simultaneous power loss likely triggered the deployment of the Ram Air Turbine (RAT), a backup system. But this still doesn't explain why the engines failed. Boeing faces a ticking clock: the final investigation report, due by September 2026, could either exonerate the Dreamliner or expose systemic flaws that force costly recalls or redesigns.

Regulatory Crosshairs and Liability Risks

So far, regulators have stopped short of grounding the 787 fleet globally—a stark contrast to the 737 MAX scandal. India, however, has proactively inspected 26 of its 33 Dreamliners, with Air India even expanding checks to Boeing 777s as a precaution. While this shows caution, it's not yet a full-blown crisis. The bigger threat? A damning final report that triggers lawsuits, insurance claims, or stricter certification requirements.

Boeing's stock has already taken a hit, trading at 13.5x forward earnings—16% below its five-year average. Analysts warn that a negative verdict could slash orders, forcing Boeing to cut production and slash jobs. The company's leverage ratio of 1.2x, versus Airbus's 0.8x, adds vulnerability if cash flows dry up.

The Silver Lining: Dreamliner Demand Remains Strong—For Now

Despite the turmoil, the 787's order backlog remains robust. Boeing has 948 Dreamliners on order as of May 2025, with airlines like Thai Airways committed to 45 units. The aircraft's efficiency—burning 20% less fuel than older widebodies—keeps it in demand for transoceanic routes.

But Boeing's production rate is stuck at 5 per month, hamstrung by supply chain bottlenecks. Compare this to Airbus's A350, which, despite its own production woes, has seen orders grow 8% since 2023. Airbus's backlog now tops Boeing's in widebody jets, and its P/E ratio of 18.7x reflects investor confidence in its execution.

Play the Long Game—or Bail Now?

Here's where investors must decide: Is Boeing's Dreamliner a fading star, or a temporary stumble in a $43.6 trillion jet market (Boeing's 20-year forecast)?

The Bull Case: The investigation clears the Dreamliner of major design flaws. Boeing's proactive inspections and partnerships with Tata Group (which now owns Air India) to rebuild trust could reignite demand. A 20% stock rebound isn't out of the question if liability risks fade.

The Bear Case: The AAIB report pinpoints systemic issues, triggering a global ground check or redesign. Orders evaporate, and Boeing's backlog shrinks as airlines pivot to Airbus's A350. The stock could sink further, especially if supply chain delays persist.

Cramer's Call: Wait for the Dust to Settle—and Then Pounce

This isn't a “buy now” situation. Wait until the final investigation report drops in late 2026. If Boeing is cleared, scoop up shares at depressed valuations—especially if the Dreamliner's backlog stays intact. But if the verdict is damning? Let others take the fall.

In the meantime, consider hedging by buying Airbus stock (EADSF) or ETFs tied to aerospace supply chains. For the brave, short Boeing ahead of the report if you think the news will be bad.

The Dreamliner's fate isn't just about a single accident—it's about whether Boeing can regain trust in an industry where safety is non-negotiable. Stay tuned, and keep your seatbelts fastened.