March 3, 2024

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Boeing stock slides after FAA grounds 737 Max 9s

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An Alaska Airlines Boeing 737 Max-9 aircraft grounded at Seattle-Tacoma International Airport (SEA) in Seattle, Washington, US, on Saturday, Jan. 6, 2024. 

David Ryder | Bloomberg | Getty Images

Shares of Boeing tumbled roughly 8% in premarket trading Monday, as investors digested the news that the Federal Aviation Administration had ordered airlines to ground dozens of Boeing 737 Max 9 aircraft for urgent inspections.

The FAA issued the order on Saturday after a door plug blew out in the middle of an Alaska Airlines flight on Friday when the nearly brand-new aircraft was flying at around 16,000 feet.

The incident again thrusts Boeing back into the spotlight. CEO Dave Calhoun has been trying to assure investors that Boeing is getting back on better footing after a string of problems including two crashes that killed 346 people, pandemic supply chain havoc and a series of quality defects.

Large-scale groundings by aviation authorities are rare, but the FAA has been scrutinizing Boeing and its best-selling 737 Max since the fatal crashes in 2018 and 2019. Boeing said it agrees with the FAA’s decision to ground the Max 9 planes for inspections. It was working on drafting instructions with federal regulators for airlines to begin instructors.

Friday’s accident occurred just as Boeing has been trying to ramp up output of the Max.

“An escape of this nature makes one question the quality control of the 737 delivery ramp and the impact of inexperienced labor on both Boeing and its supply chain,” Bank of America aerospace analyst Ron Epstein wrote in an analyst note Monday, adding that the plane was delivered just months earlier. “This aircraft still had ‘new airplane’ smell and the sticker price in its window.”

The FAA on Saturday said around 171 planes would be affected by its emergency airworthiness directive, which applies to U.S. airlines and carriers operating in U.S. territory. Alaska Airlines and United Airlines are the largest operators of the 737 Max 9 model, of…

2024-01-08 08:37:22

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