Boeing shares down 10% after second crash involving 737 MAX 8

Tuesday, 12 March 2019 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Shares of Boeing Co slid almost 10% in early trading on Monday after some airlines grounded the world’s biggest planemaker’s new 737 MAX 8 passenger jet following the second deadly crash in just five months.

The share move, if maintained through normal trading hours, would be the biggest fall in Boeing’s stock in nearly two decades, halting a surge that has seen it triple in value in just over three years to a record high of $446 last week.

A Nairobi-bound Boeing 737 MAX 8 operated by Ethiopian Airlines crashed minutes after takeoff from Addis Ababa on Sunday, killing all 157 on board. The same model, flown by Lion Air, crashed off the coast of Indonesia in October, killing all 189 on board.

China’s aviation regulator on Monday grounded nearly 100 Boeing 737 MAX 8 aircraft operated by its airlines after the crash. The CAA said it would contact the US Federal Aviation Administration and Boeing regarding the resumption of operations once they are assured that measures have been taken to ensure safety.

Boeing said on Monday the investigation into the Ethiopian Airlines crash is in its early stages and there is no need to issue new guidance to operators of its 737 MAX 8 aircraft based on the information it has so far.

Boeing’s shares lost 12% in the weeks following the Lion Air crash last year, but have more than recouped those declines. They traded down 9% at $384.51 by 0600 a.m. ET (1000 GMT).

Investors will also be watching shares in some of the company’s big airline customers, which include Dallas-based Southwest Airlines Co, the biggest operator of the MAX 8, and American Airlines Group Inc and Air Canada.

Southwest and American said overnight they remained fully confident in the aircraft and were closely monitoring the investigation.

The 737 MAX 8 uses LEAP-1B engines made by CFM International, a joint venture of General Electric Co and Safran SA. Shares in Safran also fell 1.6% on Monday.

China orders its airlines to suspend use of Boeing 737 MAX aircraft