How Boeing Was Affected During The Great Depression

The 1930s was a pivotal decade for the aviation industry. Innovative aeronautical technology was emerging, and the globe was gearing up for World War II. However, the Great Depression was also happening during this period, impacting several key industries. How was Boeing affected during this time?

Boeing B-17
The foundations of what became the B-17 Flying Fortress were laid during the Great Depression. Photo: Getty Images

An unprecedented global impact

The Great Depression was a historic global economic downturn that lasted through most of the 1930s. It followed the United States stock market crash in 1929 and eventually shook up numerous international markets.

The onset of the depression did have an initial impact on the way several airlines were operating. For instance, Delta Air Lines reverted to its roots in agriculture. Moreover, it concentrated on its flight school and aircraft maintenance services during this phase. However, by the middle of the 1930s, commercial operations were growing again.

By this time, Boeing had a decade and a half of experience under its belt. William Boeing was starting to realize his visions as his firm was developing. The company’s network tied together aircraft and engine manufacturers with airfields and carriers. The structure provided effective airmail and passenger services across the US.

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5,000th Boeing B-17
In the decade that followed the Great Depression, Boeing would be standing tall as a national powerhouse. Photo: Getty Images

Prepared just in time

Boeing Frontiers highlights that Mr Boeing formed the United Aircraft and Transport Corporation (UATC) in 1929. His friend, Fred Renschler, the head of Pratt & Whitney, also was behind this holding company. The group brought together powerhouses within the aviation industry.

Aircraft manufacturers, engine specialists, and airlines under this umbrella included the following:

  • Boeing Aircraft
  • Hamilton Metalplane
  • Sikorsky
  • Chance Vought
  • Northrop and Stearman
  • Pratt & Whitney
  • Standard Steel
  • Boeing Air Transport
  • Pacific Air Transport
  • Stout Airlines
  • National Air Transport
  • Varney Airline

The depression did little to slow down the progress of these major players in the aviation market. In fact, only two years after the economic crash, there was a significant merger on the scene. The Atlantic shares that in 1931, Boeing Air Transport, National Air Transport, Varney Airlines, and Pacific Air Transport combined to create United Airlines.

This brand would offer air service across the continent. However, during this period, it would take up to a day to travel from one side of the US to the other.

A governmental concern

The success of the UATC caused a stir within politics. President Franklin D. Roosevelt’s administration soon became concerned about activities within the aviation scene. Senator Hugo Black launched an investigation. He alleged that the key holding companies had colluded with the former postmaster general over the distribution of airmail routes to their carriers.

Subsequently, William Boeing was one of several industry figures called on to testify before the investigation’s commission. The senator then grilled him for six hours.

William Boeing
William Boeing testifying before the Senate Air Mail Committee. Getty Images

Following the commission’s findings, in February 1934, Roosevelt forced the cancellation of all airmail contracts. The War Department then took on the task of helping the postmaster general on mail services.

However, this move proved to be detrimental to postal operations. Ultimately, just 50% of the routes were served. Additionally, there were 66 accidents and 12 fatalities within five months.

Subsequently, the Air Mail Act was introduced in June 1934. This law saw the dissolving of the holding companies of these aviation outfits and banned any executives that spoke in front of the commission to hold mail contracts.

However, William Boeing has a feeling that authorities would come to this conclusion. So, in anticipation, he disbanded the UATC, which was split between Boeing Airplane Company, United Airlines, and United Aircraft Corporation.

A change of direction

Altogether, William Boeing was frustrated that all his hard work went in vain as he was just to see the fruits of his labor before this intervention. By the time the fall approached in 1934, he had decided to resign. However, before selling all his stock and leaving behind the scene that he pioneered, he wanted to make sure that his pride and joy would be in the right hands. Therefore, he handed the reigns over to Claire Egtvedt, one of his prized engineers.

Egtvedt soon became chairman of Boeing and remained in this positioning until his retirement in 1966. He would oversee some critical projects over the decades, including those that engineer Edward Wells spearheaded during the Great Depression.

The Model 299, later known as the B-17 Flying Fortress, made its first flight in July 1935. This aircraft became a US icon and was a significant player in WWII, which began four years later.

Altogether, approximately 100,000 planes would be produced by Boeing and its partners as part of the war effort. The B-17 dropped more bombs than any of its other US counterparts. Notably, these advancements helped the manufacturer become a mainstay in US aviation, and if it wasn’t for the steps it took during the prewar years, it might not have been able to be called upon.

Interestingly, in 1941, the US Court of Claims ruled that there had been no fraud or collusion regarding the airmail contracts that were being investigated in the 1930s. Therefore, Boeing and its peers were excused from any wrongdoing.

Coping with the challenges

The period of the Great Depression saw some significant changes across Boeing and its partners. However, it managed to adapt and emerge as a household name on the other side.

Boeing 787 Dreamliner
Boeing is still operating nearly a century later. Photo: Getty Images

Global aviation has gone through several critical moments in society over the last century. Along with the Great Depression, it has been through two World Wars, several recessions, and public disasters.

Boeing highlights that throughout history, the firm and the whole industry has withstood such crises to come out stronger than before. Therefore, with the aviation market going through such a significant challenge today, there is hope for the future.

What are your thoughts about Being’s operations during the Great depression? Let us know what you think in the comment section.