The aviation industry is reeling after an Air India Boeing 787-8 Dreamliner crashed shortly after takeoff from Sardar Vallabhbhai Patel International Airport in Ahmedabad, India, on Thursday, June 12, 2025. The flight, AI171, was en route to London Gatwick. The crash has triggered significant market turbulence, most notably a sharp decline in Boeing's share price.
In pre-open trade, Boeing's stock nosedived by as much as 7%, reflecting immediate investor concerns about the accident's potential impact on the company. Trading activity saw Boeing shares plummet to $197.30, a significant drop that underscores the sensitivity of the market to aviation safety incidents involving Boeing aircraft. The accident has revived memories of past crises, such as the 737 MAX groundings, which had a devastating financial impact on the company.
The Air India flight was carrying 242 people, including 230 passengers, 2 pilots, and 10 cabin crew members. Initial reports indicate that the aircraft crashed in the Meghani area of Ahmedabad, near the airport, sending a massive plume of black smoke into the sky. Emergency services, including fire engines, ambulances, and police, were immediately dispatched to the crash site. The National Disaster Response Force (NDRF) deployed three teams from Gandhinagar and three more from Vadodara to assist in rescue efforts.
According to the Directorate General of Civil Aviation (DGCA), the aircraft departed from Ahmedabad at 13:39 IST from runway 23. The pilots issued a "Mayday" call to air traffic control (ATC), but no further communication was received from the aircraft before it crashed just five minutes after takeoff. The cause of the crash is currently unknown and is under investigation. A formal investigation is expected to be initiated by the DGCA, with a possible technical team from Boeing assisting.
The crash's impact extended beyond Boeing, affecting other aviation stocks and Tata Group companies, which owns Air India. InterGlobe Aviation Ltd (IndiGo) experienced a stock decline of 3.01%, while TAAL Enterprises Ltd fell 3.84%. SpiceJet's stock dropped by 1.85%, and Global Vectra Helicorp Ltd lost 0.96%. Tata Investment Corporation plunged 3.62%, and Tata Chemicals declined 2.55%, with other Tata entities also seeing losses.
Historically, serious airplane accidents have often led to market reactions for aircraft manufacturers like Boeing. A study analyzing share price performance after nine serious airplane accidents in the last ten years revealed an average price drop of 2.67%. The market reaction is typically immediate, driven by safety concerns, regulatory scrutiny, and potential legal consequences. Accidents involving structural problems or design flaws in Boeing aircraft have had particularly severe and long-lasting impacts on the company's stock price.
The full extent of the impact on Boeing's stock will depend on the findings of the investigation into the cause of the Air India crash. Any evidence of a technical or design flaw could lead to further declines in share value and increased scrutiny from regulatory agencies.
