Updated January 8th, 2024 at 15:10 IST
Boeing shares plunge as FAA grounds MAX 9s on midair mishap
The FAA's move came in response to an alarming incident where a section of fuselage detached from an Alaska Airlines jet during its ascent.
Boeing shares fall: Boeing shares experienced a significant drop of nearly 8 per cent in early trading on Monday on the Frankfurt stock exchange following the US Federal Aviation Administration's (FAA) decision to temporarily ground some Boeing 737 MAX 9 jets.
The FAA's move came in response to an alarming incident where a section of fuselage detached from an Alaska Airlines jet during its ascent after takeoff from Portland, Oregon, compelling pilots to return and execute a safe landing with all 171 passengers and six crew members on board.
The aviation giant, Boeing, is in direct competition with Airbus, whose market share expanded notably after two Boeing MAX crashes in 2018 and 2019, resulting in the tragic loss of nearly 350 lives and a global grounding of the MAX for 20 months.
While Boeing's shares faced a decline, Airbus shares saw a 1.25 per cent rise early on Monday. Industry sources suggest that Airbus is set to announce the delivery of 735 planes in the past year, retaining its position as the world's leading planemaker for the fifth consecutive year. Airbus is expected to provide further details during its commercial update on January 11, although the company has refrained from commenting on its annual performance ahead of the official announcement.
As Boeing's Frankfurt-listed shares initially plunged, they later recovered slightly to stand 6.5 per cent lower by 0835 GMT. Jefferies, in a note, expressed concerns that the recent incident could potentially impact aircraft production if regulatory scrutiny extends to manufacturing and installation processes.
Boeing's CEO, Dave Calhoun, emphasised the company's primary focus on responding to the incident, stating that an investigation is underway by regulators. To address concerns, Boeing plans to conduct a company-wide webcast on safety on Tuesday, canceling a leadership summit previously scheduled for Monday and Tuesday for company vice presidents. The aerospace industry is closely watching how Boeing navigates these challenges and manages its response in the coming days.
(With Reuters inputs.)
Published January 8th, 2024 at 14:51 IST