Boeing Stock Up After Air India Crash Report. What We Still Don’t Know.

A man looks at wreckage showing the tail section of the Air India Boeing 787-8, which crashed on June 12, after taking off from an airport in Ahmedabad, India. (Basit Zargar / Middle East Images via AFP via Getty Images)

Boeing investors know what happened to cause Air India Flight 171 to tragically crash on June 12, but they still don’t understand why it happened.

Those answers are months away, but investors breathed a sigh of relief with the information.

Boeing stock was up 1.6%, closing at $230.51, while the S&P 500 and Dow Jones Industrial Average added 0.1% and 0.2%, respectively. Shares rose as much as $233.04, a new intraday 52-week high. The closing price was also a new 52-week high.

India’s Aircraft Accident Investigation Bureau, which is part of the country’s Ministry of Civil Aviation, filed its 15-page preliminary accident report late Friday.

The crash of a 12-year-old Boeing 787 jet powered by two GE Aerospace GENx engines was caused by a fuel disruption after takeoff with the plane traveling at about 200 miles an hour.

Flight data recorders revealed two fuel-cutoff switches, one controlling fuel to each engine, transitioned from “RUN” to “CUTOFF.” A pilot on the voice data recorder was heard asking why the fuel supply was cut off, and the other pilot responded that he didn’t do it, the report said. About 10 seconds later, both cutoff switches transitioned from “CUTOFF” to “RUN”—and the engines relit, but not fast enough to save the flight. The time from the pilot’s question to impact was less than 30 seconds.

Loading tweet…

Flipping fuel switches, which are spring-loaded with mechanical gates to prevent accidental cutoff, is what caused the crash. Why and how the switches were flipped remains a mystery.

Given what the flight data recorders revealed, the accident doesn’t appear to have anything to do with aircraft design or manufacturing.

In 2018, the Federal Aviation Administration issued a special airworthiness information bulletin, or SAIB, regarding the “potential for disengagement of the fuel control switch locking feature” present on several Boeing jets, including the 787. Bulletins, however, are information tools to alert and educate aviation stakeholders. They aren’t “airworthiness directives,” which must be completed by airlines.

The 2018 bulletin also said the locking feature was “not an unsafe condition that would warrant an airworthiness directive.” Instead, the FAA recommended inspecting the switches to ensure they couldn’t move without physically lifting the switch.

Air India didn’t carry out the inspections, according to the report, as they weren’t mandatory. What’s more, the throttle control module was replaced on the plane in 2019 and 2023, and the “reason for the replacement was not linked to the fuel control switch,” according to the report, which added there was “no defect reported pertaining to the fuel control switch since 2023.”

The investigation will continue, but the preliminary report had “no recommended actions” for Boeing 787 jet of GENx engine operators or manufacturers.

The early verdict is that there is nothing any other operators of Boeing 787 jets need to do to prevent this from happening in the future.

Monday, Bernstein analyst Douglas Harned raised his Boeing stock price target to $282 from $249 and kept his Buy rating on shares, saying the preliminary report was a positive for Boeing. He also cited the progress Boeing has made in increasing production.

In a statement, Boeing said it would defer to Indian authorities to provide information. *“*Our thoughts remain with the loved ones of the passengers and crew on board Air India Flight 171, as well as everyone affected on the ground in Ahmedabad,” the company said. “We continue to support the investigation and our customer.”

A focus on the fuel switches helped Boeing’s stock performance in recent days. Shares traded as low as $195.28 in the days after the crash but recovered, setting a prior intraday 52-week high of $230.20 on Wednesday.

Coming into Monday trading, Boeing shares were up about 6% since the Air India crash. Shares of GE Aerospace had gained about 4% since the crash.

Write to Al Root at allen.root@dowjones.com