What is safety worth in the airline business? How much rides on reputation and trust?
The answer, as Boeing has recently discovered, is billions of dollars. This month, the manufacturer saw its company value drop 4.6 percent overnight when its new high-tech 787 Dreamliner series was grounded in the U.S. and Europe due to safety fears. The drop wiped out roughly $2.7 billion of the company’s value.
The 787 fleet is undergoing a federal review, and progress was discussed Thursday by the National Transportation Safety Board (NTSB) in Washington, D.C.
According to Bloomberg report on Monday
, the company might have to write off up to $5 billion from the Dreamliner, although experts say it will probably be far less.
The way in which major companies—giants of enterprise—respond publicly to these situations affects their stock prices. The end result of poor crisis management is always the same—serious stock depreciation.
This, ladies and gents, is where communication professionals earn their keep.
What response options do these behemoths have in a crisis? Fundamentally, the answer falls into one of two categories: proactive or reactive communications.
There are game-changing variables in each scenario, and there's never one hard and fast right answer. So, to get the ball rolling, let's make some assumptions.
First, the company must establish a spokesperson. This person is a point of contact for the media; he or she understands the importance of consistent messaging and media training.
Second, the communications department and/or PR team must be notified, so it can quickly and considerately advise on suitable messaging. At that point, it needs to begin monitoring social networks and the media for associated stories.
So, what now?
A company has two options: It can go proactive, talk to its contacts in the media, call a press conference—with a spokesperson who's fully briefed on what he or she can and cannot say—and release a statement. Or the company can stay silent. That can either be a total silence, “no comment” approach, or a reactive stance in which a select few key media contacts are passed an official statement upon inquiry.
In Boeing's case, the $2.7 billion question was which approach to take? How does the company best ensure customer safety while protecting both the Boeing and Dreamliner brands? Boeing decided to combine both approaches.
It had been experiencing problems with the 787 brand since February 2012, and a number of issues with the engine and fuel tanks caused the Federal Aviation Administration to order an inspection of all the 787s in service. For the sake of the reactive/proactive communications argument, let’s take a closer look at this month’s events:
Jan. 7, 2013:
Fire on Japanese 787; Boeing statement: No.
Jan. 8, 2013:
Fuel leak reported on Japanese 787; Boeing statement: No.
Jan. 9, 2013:
All Nippon Airways cancels 787 flights because of brake issue; Boeing statement: No.
Jan. 11, 2013:
All Nippon Airways reports a crack in the cockpit windshield and an oil leak. Boeing statement: Yes. Here’s a portion of that statement:
“Boeing is confident in the design and performance of the 787. It is a safe and efficient airplane that brings tremendous value to our customers and an improved flying experience to their passengers.
Jan. 16, 2013:
“We welcome the opportunity to conduct this joint review. Our standard practice calls on us to apply rigorous and ongoing validation of our tools, processes and systems so that we can always be ensured that our products bring the highest levels of safety and reliability to our customers.
“Just as we are confident in the airplane, we are equally confident in the regulatory process that has been applied to the 787 since its design inception. With this airplane, the FAA [Federal Aviation Administration] conducted its most robust certification process ever. We expect that this review will complement that effort.”
All Nippon Airways makes emergency 787 landing after lithium battery burns out mid-flight; Boeing statement: Yes. Here’s the full statement:
"The safety of passengers and crew members who fly aboard Boeing airplanes is our highest priority.
"Boeing is committed to supporting the FAA and finding answers as quickly as possible. The company is working around the clock with its customers and the various regulatory and investigative authorities. We will make available the entire resources of The Boeing Company to assist.
"We are confident the 787 is safe and we stand behind its overall integrity. We will be taking every necessary step in the coming days to assure our customers and the travelling public of the 787's safety and to return the airplanes to service.
"Boeing deeply regrets the impact that recent events have had on the operating schedules of our customers and the inconvenience to them and their passengers."
Boeing decided to play the waiting game with its media relations. Issuing statements can be seen as an admission of a problem, and problems affect stock prices. However, its hand was forced after the Department of Transportation stepped in and the FAA announced a review of the Dreamliner on Jan. 11.
When Boeing went public, it really went public. The company issued the first two statements (via PR Newswire) ensuring they were circulated to media outlets far and wide. Also, the company put its latest statements on its U.S. and U.K. home pages and recently released an update to the safety review taking place in the U.S. and Japan that can be viewed by clicking here
The Boeing social media efforts ran in line with the statement chronology. Its Facebook page is quiet and not regularly maintained, but its aeronautical Twitter feeds (@boeing
) have seen more activity.
The @boeing feed has posted nine tweets since Jan. 11 about the 787 debacle; @boeingairplanes has shared 14 tweets (as of this writing). The social media team tried to mix good Dreamliner news stories with the reactive statement linking tweets, as well as assurances that the company was committed to safety and was doing everything it could to return its airplanes to service.
By remaining silent until the FAA stepped in, Boeing prevented unnecessary panic and shareholder unrest. Once the FAA spoke up, Boeing released statements emphasizing the safety record and rigorous testing the 787 had been through, and then made its chairman, president, and CEO Jim McNerney the point of contact for the media.
McNerney issued a textbook response in his statements assuring customers that Boeing was still convinced of the 787’s integrity and he was looking forward to the joint Boeing/FAA review.
“We look forward to participating in the joint review with the FAA, and we believe it will underscore our confidence, and the confidence of our customers and the traveling public, in the reliability, safety and performance of the innovative, new 787 Dreamliner."
That will be when the next chapter in this communications case study—stakeholders wait with bated breath for the FAA findings, which could either cost Boeing billions or redeem the incident-plagued Dreamliner brand.
Luke Budka (@lukebudka) is an account director at London B2B comms agency TopLine Communications.