Boeing shares are falling as investors assess the fallout from the 737 Max incident
Boeing’s stock price fell sharply on Monday in the first trading session after part of the fuselage of one of its 737 Max 9 jets exploded during an Alaska Airlines flight on Friday evening.
Boeing shares fell nearly 9 percent in early trading. Spirit AeroSystems, which made the door plug that was torn from the plane, fell even more dramatically, down 15 percent.
The Alaska Airlines flight departing from Portland, Oregon, lost the center cabin door plug in mid-air, exposing passengers to howling winds and forcing an emergency landing. None of the 171 passengers and six crew members on board were seriously injured.
The Federal Aviation Administration on Saturday ordered US airlines to ground all their Boeing 737 Max 9 aircraft. The National Transportation Safety Board is investigating the incident.
United Airlines and Alaska Airlines, the largest users of the Max 9, canceled more than 350 flights on Monday, representing 8 percent of United’s schedule and 20 percent of Alaska’s. Flight conscious. United’s shares rose Monday and Alaska’s shares fell about 4 percent.
Spirit AeroSystems said in a rack Monday that it “is a committed partner of Boeing on the 737 program, and we will continue to work with them on this issue.”
Another version of the Max, a 737 Max 8, was involved in two crashes in 2018 and 2019 that killed hundreds of people, leading to the vehicle’s global grounding. And last month, Boeing urged airlines to inspect more than 1,300 Max planes delivered for a possible loose bolt in the rudder control system.
While investors were spooked, few analysts expected the financial damage to Boeing and others to continue, based on what they had seen from regulators and companies after the Alaska Airlines incident.
Analysts at Barclays noted that grounding the jets would have only a “minor financial impact” because the Max 9 fleet was relatively modest at 215 aircraft, 144 of which operated in the United States.
Analysts at Williams Blair said the drop in Boeing shares was a buying opportunity. “While the Alaska Airlines door plug accident was terrifying,” they wrote, “we do not believe it will have a major financial impact unless another incident occurs after the aircraft returns to service.”
A Morningstar research report agreed that the impact would not be “material” but noted that “the dramatic nature of the error will result in Boeing’s product management being questioned again by customers, regulators and the airline industry.” audience.’