Boeing’s shares fall following China Eastern Airlines’ crash
Boeing’s shares fell 4.60 per cent today, opening at $184.40 after a 737 operated by China Eastern Airlines crashed in the country.
Compared to Friday’s closure, the company’s stocks went down 8 per cent in pre-market trading but recovered slightly after the bell.
Authorities said the crash’s cause was still under investigation, but the plane involved was a Boeing 737-800, the precursor of the infamous 737 MAX.
China Eastern Airlines decided to ground all its 737-800 jets, while Boeing said it was still gathering information on the accident. Even though the carrier didn’t announce the exact number of victims, local media said there were no survivors.
The plane was en route from the south-western city of Kunming to Guangdon, near the border with Hong Kong, when it crashed into a mountainous area.
Chinese President Xi Jingping called on authorities to establish what went wrong as soon as possible.
The incident took place as the company was working towards getting regulatory approval from Beijing to fly the 737 MAX, whose use was halted for a couple of years following the crashes that took place in Indonesia and Ethiopia of 2018 and 2019.
According to aviation analyst Alex Macheras, the incident is the last straw in an already strained relationship between Beijing and Boeing.
“Boeing has worked hard to convince China’s regulator of the safety updates to its troubled 737 MAX,” Macheras told City PM
Following the Ethiopia Airlines’ crash of March 2019 – in which 157 lost their lives because of a software malfunction – China decided to ground its fleet.
“China was the first in the world to ground Boeing’s 737 MAX, and one of the last to only begin discussing re-certifying the jet,” he said.
“While the aircraft involved in this incident was not a 737 MAX, it does belong to the same 737 family, which will undoubtedly unnerve Chinese authorities who are already among the most cautious in the world.”
China has among the best airline safety record in the world. According to Aviation Safety Networkm China’s latest fatal crash was in 2010, when 44 people died aboard an Embraer-190.