Boeing shares dropped nearly nine percent in pre-market trading following the FAA’s grounding of its 171 Boeing 737 Max 9 aircraft after catastrophe almost struck on an Alaska Airlines plane.
On Monday shares of Boeing Corp fell 8.6 percent just days after federal regulators grounded about 171 planes in operation worldwide on Saturday.
The aircraft manufacturer could lose about $12.5 billion in value if losses hold through market open.
Meanwhile Alaska Air’s shares were down 4.3 percent, while United Airlines, the other U.S. carrier that operates the jet, was down 2.4 percent. Spirit AeroSystems, which manufactured and initially installed the fuselage part on the brand new MAX 9 jet in question, was down 20.8percent, deepening the gloom around the supplier recently recovering from a string of quality problems.
It comes after terrified passengers said they were left fearing for their lives on Friday after an emergency exit used as a cabin window blew out of the Alaskan Airlines flight from Portland to California at 16,000 feet.
Boeing shares dropped nearly 10 percent in pre-market trading following the FAA’s grounding of its 171 Boeing 737 Max 9 aircraft after catastrophe almost struck on an Alaska Airlines plane
An emergency exit used as a cabin window blew out of the Alaskan Airlines flight from Portland to California at 16,000 feet
There were no serious injuries from Friday’s terrifying air failure, but passenger’s belongings including phones flew out the aircraft
Wall Street analysts viewed the accident as a temporary setback to Boeing, but some took a dim view of a series of quality problems related to the 737 MAX family of aircraft.
Alaskan Airlines quickly made the move after the almost-disaster in Portland on Friday, and CEO Ben Minicucci said in a statement the planes will only go back into its fleet after clearing precautionary maintenance procedures, which he expected to be ‘in the next few days.’
In a statement shared to X on Saturday, regulator said it is requiring immediate inspections of certain jets before they can return to the skies.
The FAA’s decision to ground the fleet of Boeing 737 MAX 9’s comes as several airlines and regulators have taken similar steps.
Boeing competes with Airbus, which has expanded its market share since two Boeing MAX crashes in 2018 and 2019 that killed nearly 350 people and led to the MAX’s worldwide grounding for 20 months.
Airbus shares were up more than 1 percent early on Monday. The company this week will announce that it delivered 735 planes last year, beating Boeing to remain the world’s largest plane maker for the fifth year in a row, according to industry sources.
There were no serious injuries from Friday’s terrifying air failure, but passenger’s belongings including phones flew out the aircraft.
The flight that was set out to arrive at Ontario International in California turned back around after the plug door came off on Friday night
This image from video provided by Elizabeth Le shows passengers near the damage on an Alaska Airlines Boeing 737 Max 9, Flight 1282, which was forced to return to Portland International Airport on Friday, Jan. 5, 2024. (Elizabeth Le via AP)
One of the cellphones, an iPhone, was found by video game designer Sean Bates who said that he picked it up while out for a walk. In a series of posts on X, Bates said that the intact phone was still in airplane mode and had half of its battery life left.
According to aviation outlet The Air Current, the aircraft involved in the incident had come under scrutiny by officials just a day before the window blew out.
The outlet claimed that on January 4, an intermittent warning light appeared as it taxied to a terminal from a previous flight, which led the airline to remove it from extended range operations (ETOPS). Later that same day in a separate flight, the warning came back on.
The Boeing 737 MAX 9 jet involved in the incident had reportedly only gone into service in November 2023, and was practically new by aviation standards after reportedly undergoing less than 200 flights before the incident.
The NTSB has begun an investigation that is likely to last months and focus on the paneled-over exit door that blew off. The so-called door plug is installed on some jets that have fewer seats instead of an emergency exit panel. The jets ordered grounded by the FAA all have those panels installed.
Investigators said Sunday they had found the door plug, and hoped it would provide physical evidence of what went wrong.
HISTORY OF SAFETY ISSUES
It’s the latest setback for Boeing’s best-selling plane, which has seen a series of concerning safety incidents that damaged the company’s reputation over the last years.
A Max 8 jet operated by Lion Air crashed in Indonesia in 2018, and an Ethiopian Airlines Max 8 crashed in 2019. Regulators around the world grounded the planes for nearly two years while Boeing changed an automated flight control system implicated in the crashes.
Boeing has estimated in financial reports that fallout from the two fatal crashes has cost it more than $20 billion. It has reached confidential settlements with most of the families of passengers who died in the crashes.
Federal prosecutors and Congress questioned whether Boeing had cut corners in its rush to get the Max approved quickly, and with a minimum of training required for pilots.
In 2021, Boeing settled a criminal investigation by agreeing to pay $2.5 billion, including a $244 million fine. The company blamed two relatively low-level employees for deceiving the Federal Aviation Administration about flaws in the flight-control system.
After a pause following the crashes, airlines resumed buying the Max. But the plane has been plagued by problems unrelated to Friday’s blowout.
Questions about components from suppliers have held up deliveries at times. Last year, the FAA told pilots to limit use of an anti-ice system on the Max in dry conditions because of concern that inlets around the engines could overheat and break away, possibly striking the plane. And in December, Boeing told airlines to inspect the planes for a possible loose bolt in the rudder-control system.
A passenger on a Southwest Airlines jet was killed in 2018 when a piece of engine housing blew off and shattered the window she was sitting next to. However, that incident involved an earlier version of the Boeing 737, not a Max.
