Boeing shares slump after FAA grounds Max 9 jets
Boeing shares listed in Frankfurt and in US premarket trading fell almost 8% early on Monday after the U.S. Federal Aviation Administration ordered the temporary grounding of some Boeing 737 MAX 9 jets.
A piece of fuselage tore off an Alaska Airlines jet on Friday following takeoff from Portland, Oregon, forcing pilots to turn back.
Boeing competes with Airbus, which has expanded its market share since two Boeing MAX crashes in 2018 and 2019 that killed nearly 350 people and led to the MAX’s worldwide grounding for 20 months.
Airbus shares were up more than 1% early on Monday. The company this week will announce that it delivered 735 planes last year, beating Boeing to remain the world’s largest planemaker for the fifth year in a row, industry sources said.
Reuters last week reported that the number would reach the mid-730s, beating the company’s target of 720.
Airbus is also on course to beat industry records for gross and net orders, industry sources said last month. Airbus has declined any comment on its annual performance ahead of a commercial update it will present on Jan 11.
Aerospace hit
Boeing’s Frankfurt shares pared early losses to stand almost 8% lower.
Shares in its suppliers and customers could also take a hit as many airlines grounded their MAX jets following Friday’s incident.
Spirit Aero shares were down 15.9% in U.S. pre-market trading. Alaska Air shares fell 5% while United Airlines shares dropped 2.8%.
Jefferies said in a note that the latest Boeing incident could slow aircraft production if manufacturing and installation processes are subject to further regulatory probes.
“It highlights a history of quality escape problems, particularly at Spirit (Aero). Quality escapes are not acceptable in an industry in which single failures can have serious consequences,” Bernstein analysts said in a note.
Boeing CEO Dave Calhoun on Sunday said the firm’s response to the incident was its main focus right now as regulators carry out an investigation.
The planemaker also plans to hold a company-wide webcast on safety on Tuesday to address its response. It cancelled a leadership summit for company vice presidents scheduled for Monday and Tuesday.
