China Plane Crash: As Boeing's shares fall, all about the behemoth's recent safety record

On Monday, a Boeing 737-800 airliner crashed in southern China, raising new concerns about the flight's safety records. The 737-800 is a member of Boeing's Next Generation family of narrow-body jets, which have a maximum range of nearly 3,000 miles but are usually used for shorter flights. Notably, Boeing's 737-Max, a newer narrow-body airliner, was temporarily grounded around the world following a spate of crashes over the last few years.

Following the crash of one of the 737-Max planes in Indonesia in late 2018 and another in Ethiopia in early 2019, the 737-Max was heavily scrutinised. The Max was grounded all over the world following the second disaster in March 2019. After a series of changes, Boeing was able to re-approve the plane for commercial operation in the majority of countries 20 months later.

However, with the recent incident, the aircraft manufacturer will be scrutinised once again. The previous two incidents have already had a significant impact on Boeing's sales and shares. Even so, Boeing had been working hard to re-establish its market dominance, but with the recent crash, the road ahead appears difficult. 

Impact of crash on Boeing's Shares

Boeing Co shares plunged 8% before the bell on Monday after a China Eastern Airlines plane crashed in the mountains of southern China. The cause of the crash was unknown at the time, and rescue crews reported finding no survivors, according to the media. Boeing stated that it was gathering more information.

In a statement, China Eastern Airlines said, "We can confirm the plane has crashed." Its stock dropped 15.8% on the New York Stock Exchange. According to Flightradar24, the plane involved in the crash was a six-year-old Boeing 737-800, a precursor to the 737 MAX model. Boeing's stock was down $177.40, and China Eastern's American Depositary Receipts were down $15.89.

A look at Boeing's safety record

According to the Boeing website, the popular 737-800 model has a maximum seating capacity of 189 passengers and is powered by CFM-56 engines. A cooperative venture between General Electric Co and Safran SA in France produces the engines. The 737 engine has been sold in excess of 15,000 times, making it the most popular commercial aircraft in history.

Despite its popularity, one of Boeing's most current variants of the engine, the Boeing 737 Max, has been suspended between March 2019 and December 2020 due to safety concerns. A Boeing 737 was engaged with another catastrophe on March 21, 2022, this time in China, carrying 132 people. 

The disaster occurs as Boeing nears regulatory approval in China for its cash cow, the 737 MAX, following two tragic crashes in Indonesia and Ethiopia that forced the plane's grounding in the world's largest domestic aviation market. The plane is crucial to Boeing's health and recovery, as the company ramps up manufacturing in response to a revival in travel demand. Here's a look at the Boeing 737's safety record, with a focus on the MAX variant.

Apart from the most recent one in China, Boeings have been involved in a number of high-profile accidents in recent years. There have been 74 mishaps involving Boeing planes since 2000, with 13 fatalities involving the latest generation design. It's crucial to remember, however, that being involved in such occurrences does not automatically make a plane more dangerous. For every single deadly crash, the most recent generation of Boeing 737 aircraft has flown 12.5 million safe flights.

In reality, according to data from the end of 2019, Boeing 737's nearest competitor, the Airbus A320, has the same safety record. Nonetheless, events have had a negative influence on Boeing's reputation, with the most recent disaster in China causing an 8% decline in the company's stock price on March 21st.

Specifically, two incidents prompted a worldwide grounding of the Boeing 737 MAX. On October 29th, 2018, Lion Air Flight 610 and Ethiopian Airlines Flight 302, both 737 MAX 8s, crashed shortly after takeoff, killing everyone on board. Between March 2019 and December 2020, aviation authorities around the world grounded the planes in response to the deadly crashes. The 737 MAX took to the skies for the first time in 2017, and it is based on the original 737.

The MAX, however, has quieter and more efficient engines that are located further forward on the plane, closer to the front of the wings. It caused aerodynamic issues in "unusual flight conditions." Boeing added special software dubbed the Maneuvering Characteristics Augmentation System (MCAS) to "deliver consistent handling attributes" in order to fix the problem. Following the uproar over the two incidents, it was revealed that the United States Federal Aviation Administration was not fully informed about the new technology.

Reason behind the crash

The China Eastern Airlines flight was flying at a regular cruising altitude of roughly 30,000 feet when it suddenly descended into a deep dive, according to tracking data. According to the data, the jet fell roughly 90 seconds after whatever brought it tumbling to the ground. At 0620 GMT, the plane, which Flightradar24 indicated was six years old, was travelling at an altitude of 29,100 feet. Data revealed it had dropped to 9,075 feet in just over two minutes and 15 seconds. Its last tracked altitude was 3,225 feet after another 20 seconds.

Crashes during the cruise period of flight are uncommon, despite accounting for the majority of flight duration. At the time of the crash, online weather data in Wuzhou showed partly cloudy skies with good visibility. According to state broadcaster CCTV, President Xi Jinping asked for investigators to determine the reason of the disaster as soon as possible and to maintain "absolute" aviation safety.

It's worth noting that the Lion Air and Ethiopian Airlines flights both crashed in the similar way. Investigators discovered that the plane's stabilisers were inclined upward, according to a New York Times story. The automatic stabilisers would have forced the plane's nose down at that angle, identical to the Lion Air plane that fell into the Java Sea. Shortly after takeoff, both planes unexpectedly fell and crashed to the ground. Six minutes after takeoff, the Ethiopian Airlines flight went down. After 13 minutes of flight, the Air Lion plane crashed.

The jets were outfitted with the Maneuvering Characteristics Augmentation System (MCAS), which is a relatively new feature on Boeing's Max planes. The MCAS is a system that automatically lowers the plane's nose when its exterior angle of attack (AOA) sensors detect that the plane is flying too slowly or steeply, putting it at risk of stalling. 

Image: AP