Boeing shares tumble as Ethiopia, China and Indonesia ground 737 MAX jets after crash

The aftermath of the tragic crash of an Ethiopian Airlines 737 MAX 8 on Sunday, which saw all 157 passengers and crew killed, has seen several countries and airlines ground their 737 MAX 8s until further notice. This is the second fatal crash involving the MAX 8 after an Indonesian Lion Air jet crashed in 2017 killing all 187 passengers and crew on board. The consequence for Boeing saw its share price tumble 12% on opening this Monday, according the Financial Times, the largest drop since the 9/11 attack on the World Trade Center. The share price had rallied to a 6% drop by mid-afternoon.

The Civil Aviation Administration of China was the first to react, ordering all domestic airlines under its remit to ground their MAX 8 jets, noting similarities between the Ethiopian Airlines and Lion Air crashes.  “Both [crashes] occurred during take-off and have certain similarities,” the Chinese regulator said on its website, adding that the suspension was “in accordance with management principles of zero tolerance for security risks and to ensure flight safety for civil aviation in China”. This is also an unusual step as governments usually wait for an airliner’s official certifying authority to make recommendations first, in this case the U.S. Federal Aviation Authority.

The crash has come at a critical time for Boeing, which is in the middle of negotiating a deal with China to buy more Boeing jets. Both China and Indonesia are two of its most important Asian markets with China currently having 100 737 MAX aircraft on order.

Indonesia has grounded all its MAX 8s prior to inspection to ensure the “aircraft is airworthy”. Ethiopian Airlines has grounded its four other MAX 8s as a precaution. Cayman Airways has grounded both its MAX 8 jets and South Africa’s Comair its single MAX 8.

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