Boeing shares plunge as FAA grounds 171 737 Max 9 aircraft
In a significant blow to Boeing, the Federal Aviation Administration (FAA) has issued a temporary grounding order for a number of Boeing 737 Max 9 aircraft. As a result, Boeing shares experienced a decline in premarket trading in the France stock market on Monday. During the early hours of trading at 4:30 a.m. ET, Boeing shares were down 8%, trading at a price of 228.54, marking a decrease of 20.46 (-8.22%).
Investors react to temporary grounding order for Boeing planes
News of the FAA’s emergency airworthiness directive mandating the temporary grounding of over 170 Boeing 737 Max 9 aircraft has resulted in a significant response from investors. The order, issued on Saturday, affects around 171 planes and requires thorough inspections before the resumption of flight operations. This directive primarily impacts U.S. airlines and carriers within U.S. territory. The market reaction has led to a decline in Boeing shares, reflecting the cautious sentiment among investors.
Structural issue on Alaska Airlines flight triggers FAA investigation
A structural issue with a Boeing 737 Max 9 aircraft used by Alaska Airlines has triggered an investigation by the National Transportation Safety Board (NTSB) and led to the FAA’s temporary grounding order. Images circulated on social media depicted passengers using oxygen masks, and the incident prompted the flight to return to Portland shortly after departing for Ontario, California. The NTSB is committed to prioritizing safety in its investigation, while the FAA Administrator, Mike Whitaker, affirmed the importance of safety in decision-making.
United and Alaska Airlines most affected by grounding directive
The temporary grounding of the Boeing 737 Max 9 aircraft has had a significant impact on United Airlines and Alaska Airlines. Of the 171 grounded aircraft outlined in the FAA’s directive, United Airlines has 79 affected planes, while Alaska Airlines has 65. The remaining 74 planes are spread across six other airlines. The aircraft involved in the incident with Alaska Airlines was a 178-seater that had been handed over to the airline on November 11th.
FAA’s diligence in overseeing Boeing 737 Max highlighted once again
The FAA’s temporary grounding order for the Boeing 737 Max 9 aircraft highlights the agency’s ongoing diligence in overseeing the safety of these planes. This diligence comes as a result of two fatal crashes nearly five years ago, which prompted a global grounding of the jetliner. While extensive groundings mandated by aviation authorities are rare, the FAA’s commitment to ensuring the safety of these aircraft reflects their dedication to preventing any potential risks to passengers and crews.
Analyst comment
Positive
As an analyst, the market is likely to react negatively to the news of the temporary grounding order for Boeing 737 Max 9 aircraft. This will lead to a decline in Boeing shares as investors have a cautious sentiment towards the company. United and Alaska Airlines will be the most affected by the grounding directive.
