One of the biggest issues so far this year for Boeing (NYSE: BA) has been trying to earn back the lost trust in its MAX 737 jetliners. After two fatal crashes in 2019 over similar issues, the 737 has been grounded for a long time, with many airlines choosing to cancel future orders of the plane. After a while, the company finally saw its Max 737 fleet return to the skies as aviation authorities ruled that the plane was perfectly safe to fly. However, it was revealed on Christmas day that one specific Boeing 737 ended up having to divert its course over significant engine issues.
It was the last thing that the company wanted to hear going into the new year. The Air Canada flight in question had received an engine alert after the flight began, requiring one engine to be turned off, and the plane decided to divert course to land sooner. Although the plane was empty and had no passengers on it, it has raised fresh concerns about the state of these 737’s.
“Modern aircraft are designed to operate with one engine and our crews train for such operations,” read a statement from Air Canada. While the incident in question took place on December 22nd, the actual news did come out to the public until Christmas Day.
Besides this, little else was told about the actual incident. Although a relatively minor case overall, it wouldn’t be surprising if shares of Boeing ended up tumbling significantly on Monday once the markets open from the holiday weekend.
Boeing had dealt with a 20-month long flight ban, which was only lifted in November after U.S. Federal Aviation Administration reviewed the plane and tested it again. Originally, the plane had problems with the computer software, which ended causing the two major crashes back in 2019. Further investigations found out that Boeing had, in an effort to cut costs, employed junior engineers to work on the software instead of a more senior team.
Expect shares of Boeing to tumble a little on Monday in response to the news. Since the beginning of the year, Boeing has been one of the more hard-hit airline stocks on the market, with share stumbling around 33% since the start of the year. Most other airline stocks have suffered similarly, although a fair number suffered even worse. With a new coronavirus strain popping up in Europe, it wouldn’t be surprising if airfare takes another big hit going into the early parts of 2021.
Boeing Company Profile
Boeing is the world’s largest aerospace and defense firm. With headquarters in Chicago, the firm operates in four segments, commercial airplanes, defense, space & security, global services, and Boeing capital. Boeing’s commercial airplanes segment produces about 60% of sales and two-thirds of operating profit, and it competes with Airbus in the production of aircraft ranging from 130 seats upwards. Boeing’s defense, space & security segment competes with Lockheed, Northrop, and several other firms to create military aircraft and weaponry. The defense segment produces about 25% of sales and 13% of operating profit, respectively. Boeing’s global services segment provides aftermarket servicing to commercial and military aircraft and produces about 15% of sales and 21% of operating profit. – Warrior Trading News