Boeing Stock Drops as Investors Assess Fallout From Alaska Airlines 737 Max

Incident Overview

Part of the fuselage of one of Boeing’s 737 Max 9 jets blew out on an Alaska Airlines flight on Friday night. None of the 171 passengers and six crew members aboard were seriously injured.

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Stock Impact

Boeing’s share price fell about 8 percent on Monday, the first trading day after the incident. Spirit AeroSystems, which made the door plug that tore off, saw its stock drop by about 11 percent.

Flight Cancellations

United Airlines and Alaska Airlines canceled more than 350 flights on Monday, representing 8 percent of United’s schedule and 20 percent of Alaska’s, according to FlightAware.

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Regulatory Action

The FAA ordered inspections of certain Boeing 737 Max 9 planes similar to the one involved. The NTSB is investigating the incident. European regulators did not ground Max 9 jets in Europe which have a different configuration.

Company Responses

Boeing issued inspection instructions. Spirit said it continues to work with Boeing. The United’s stock rose to 2.8% while Alaska’s fell 0.2% on Monday, recovering losses.

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Analyst Predictions

Analysts said the financial impact would be small as the Max 9 fleet is modest. The incident is unlikely to have a major financial impact unless another occurs after planes return to service.

Calls Into Question

Analysts said the dramatic nature of the flaw would call Boeing’s product governance into question with customers, regulators, and the public.

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People Also Ask

Why is Boeing stock down?

Boeing, one of the world’s leading aerospace companies, has recently faced a decline in its stock value. The primary reason behind this downturn can be attributed to a series of challenges the company has encountered. Firstly, the worldwide grounding of the Boeing 737 MAX fleet following two tragic crashes has had a significant impact on investor confidence. The subsequent halt in production of the 737 MAX further exacerbated the decline in Boeing’s stock value.

Is Boeing being sued for 737 Max?

Yes, Boeing is currently facing numerous lawsuits related to the 737 MAX. The crashes of Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March 2019 resulted in the loss of 346 lives. These incidents raised serious concerns about the safety and design of the Boeing 737 MAX aircraft. Families of the victims, shareholders, and airlines have filed lawsuits against Boeing, seeking compensation and holding the company accountable for the accidents.

Who grounded the 737 MAX first?

The decision to ground the Boeing 737 MAX was not made by Boeing itself, but rather by aviation regulatory authorities around the world. Following the Ethiopian Airlines crash in March 2019, several countries, including China, the European Union, and the United States, issued orders to ground the 737 MAX fleet. The Federal Aviation Administration (FAA) in the United States was one of the last regulatory bodies to ground the aircraft.

What Boeing blames for its big loss?

Boeing has attributed its significant financial losses to a combination of factors. The grounding of the 737 MAX fleet has led to a halt in deliveries and a decrease in new orders, resulting in a decline in revenue. Additionally, the costs associated with addressing the software issues and implementing necessary safety enhancements on the 737 MAX have also contributed to the company’s financial challenges. Furthermore, the COVID-19 pandemic further impacted the aviation industry, leading to reduced demand for new aircraft and exacerbating Boeing’s losses.

Why have airline stocks dropped?

The airline industry as a whole has experienced a decline in stock prices due to various factors. The COVID-19 pandemic has had a severe impact on global travel, with widespread travel restrictions and reduced passenger demand. Airlines have faced significant financial losses as a result, leading to a decrease in investor confidence. The grounding of the Boeing 737 MAX fleet, along with concerns about the safety of air travel in general, has further contributed to the drop in airline stocks.

What was the Boeing issue?

The main issue surrounding Boeing is the series of accidents involving the Boeing 737 MAX aircraft. These accidents raised questions about the safety and design of the aircraft, leading to a worldwide grounding of the fleet. The software system known as the Maneuvering Characteristics Augmentation System (MCAS), which was designed to prevent stalls, has been at the center of scrutiny. The failure of the MCAS system in both crashes has prompted investigations and has put Boeing under intense scrutiny.

What are the problems with Boeing 737 MAX?

The Boeing 737 MAX has faced several critical problems. The primary issue revolves around the MCAS, which erroneously activated in both the Lion Air and Ethiopian Airlines crashes, leading to the nose of the aircraft being forced downward. This flaw in the software system resulted in the pilots losing control of the aircraft. Additionally, there have been concerns about the training provided to pilots and the lack of disclosure regarding the MCAS system’s existence. These problems have highlighted the need for significant changes in the design, training, and regulatory oversight of the 737 MAX.

How many lawsuits against Boeing?

Boeing is currently facing numerous lawsuits related to the 737 MAX accidents. Families of the victims, shareholders, and airlines have filed lawsuits seeking compensation for the loss of lives, financial damages, and reputational harm. The exact number of lawsuits is continuously evolving as more individuals and entities come forward to hold Boeing accountable for the tragedies.

What is the ethical scandal with Boeing?

The ethical scandal surrounding Boeing primarily revolves around the company’s handling of the 737 MAX crisis. There have been allegations that Boeing prioritized profits over safety and failed to disclose critical information about the MCAS system to regulators, pilots, and airlines. This lack of transparency and accountability has raised serious ethical concerns, as it compromised the safety of passengers and the reputation of the aviation industry as a whole.

Are Alaska planes still grounded?

No, as of the time of writing, Alaska Airlines has resumed operations of its Boeing 737 MAX aircraft. After the necessary software updates and safety measures were implemented, regulatory authorities lifted the grounding order for the 737 MAX fleet. However, it is essential to note that the grounding of the 737 MAX was a global decision, and each airline had to comply with the regulatory requirements and safety protocols before resuming operations.