Categories Industrials, Technology, U.S. Markets News
Boeing battles crisis after 737 Max planes grounded
The crisis has been mounting for Boeing (BA) as the aerospace giant has faced a ban of Boeing 737 Max planes from flying in a list of countries including China, US, and Japan. President Donald Trump has ordered to immediately ground all Boeing 737 Max 8 aircraft as the model was involved in two deadly crashes in five months.
The President has pointed to a data that suggested similarities between the crash in Indonesia in October and the Ethiopian Airlines crash on Sunday. The crisis has set off a stock selloff since Monday. The stock lost around 11% in the early trade on Monday and has fallen over 10% since then.
The Ethiopian Airlines plane, en route to Nairobi, crashed soon after taking off from the Addis Ababa airport Sunday and all of the 157 persons on board died. The incident was reminiscent of the Lion Air crash in October last year. This raised concerns about the reliability of the aircraft and several countries have grounded the 737 Max planes.
According to aircraft-tracking site FlightRadar24, the final Max 8 plane landed in Halifax in Nova Scotia, Canada late Wednesday. The 737 Max series has been the fastest-selling model in the history of Boeing. Japan, Canada, the European Union and countries across Asia took actions to suspend Max jets flights.
In addition, the investigation into the Max 8 plane crash has reached a crucial phase as flight recorders, or black boxes, from the Ethiopian Airlines Flight 302 arrived in Paris. Ethiopia has sought the assistance of the French Bureau of Enquiry and Analysis for Civil Aviation Safety for investigating the material.
Reports surfaced that a customer has requested Boeing to compensate it for grounding the aircraft. This is expected to turn into a major concern for the company. According to a CNN report, the pilots struggled to control the Ethiopian plane, and within minutes of the takeoff, the captain reported flight-control problems to the air traffic control.
Also read: Boeing stock down after Lion Air crash
The company has delivered 376 Max jets to American Airlines (AAL) with around 4,636 orders still left to be delivered. Investors remained clueless about what happens to those orders. Meanwhile, few airlines have the option to change the decision of the orders while others expect new jets in the coming weeks and months.
Boeing is yet to deliver 75 Max jets to American Airlines, 123 for United Airlines (UAL) and 249 for Southwest Airlines (LUV). In addition, about 25 Max planes are yet to be delivered to Ethiopian Airlines, which suffered Sunday’s crash, and 187 for Lion Air.
Shares of Boeing ended Wednesday’s regular session up 0.46% at $377.14 on the NYSE. The stock is down 0.39% in the early trade on Thursday.
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