Boeing (NYSE: BA) saw its stock falter on Monday as a Chinese airline using one of its planes suffered a fatal crash. A Boeing 737 flown by China Eastern Airlines crashed into the ground. Although the fates of the 132 passengers were unknown, now it appears that all of them might have perished in the crash.
The entire ordeal is reminiscent of two other fatal crashes that Boeing had to deal with many years ago. These are the two 737 MAX airliners that crashed back in 2019, which resulted in the loss of over 200 passengers’ lives. The resulting crashes, which occurred just five months after each other, led to Boeing’s 737 Max’s being grounded around the world for well over a year. Boeing’s stock price tanked as a result of the scandal.
Although the company’s 737 MAX’s are back in the air again, the entire ordeal has left a lingering sense of paranoia that this recent crash in China might also be due to similar reasons as the MAX crashes – rushed construction and cutting corners.
The exact plane in question was the 737NG, or Next Generation, a model of plane Boeing released before the MAX. If all 132 people on board the flight died, it would mark China’s deadliest plane crash in over 30 years.
“We have been in close communication with our customer and regulatory authorities since the accident, and have offered the full support of our technical experts to the investigation led by the Civil Aviation Administration of China,” said Boeing CEO Dave Calhoun in a letter to employees. “I will keep you apprised of information about the accident as investigation protocols allow.”
Up until recently, Boeing has been preparing to resume deliveries of its MAX airliners to China once again, a big milestone for the company as Chinese airlines are significant buyers of Boeing. However, there’s a good chance the country might cancel this arrangement after all, leaving the planemaker stuck with even more unsold 737s.
Considering Boeing recently reported a $5.5 billion loss in January, the third annual loss in a row now, being unable to sell any more 737s to China would make the company’s financial situation even worse.
Shares of Boeing were down around 4.5% following the news. Related aviation stocks, like Spirit AeroSystems, a maker of 737 fuselages, was down by a similar margin on Monday. Since 2022 began, Boeing has fallen by around 10.6%, worse than the S&P 500 but a bit better than the Nasdaq.
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
