Boeing shares fell 8% on Monday, wiping out nearly $13 billion in market value after U.S. aviation regulators grounded parts of its best-selling 737 MAX planes.
Part of the fuselage of an Alaska Airlines 737 MAX 9 jetliner was torn off after taking off from Portland, Oregon, on Friday, forcing the pilot to return.
The Federal Aviation Administration then ordered the temporary grounding of 171 narrow-body MAX 9 jets.
Shares of Alaska Airlines fell slightly, but United Airlines, the other U.S. airline that operates the jet, closed up 2.8%.
Spirit AeroSystems, which makes and originally installed fuselage parts for the brand-new MAX 9 jet in question, has been shut down by 11%, deepening the cloud over the supplier, which has recently been recovering from a series of quality problems. Aerospace company Honeywell fell 0.4%.
While Wall Street analysts saw the incident as a temporary setback for Boeing, others took a dim view of a series of quality issues related to the 737 MAX family of planes.
“This highlights a history of quality leak problems, especially at Spirit AeroSystems. In an industry where a single failure can have significant consequences, quality evasions are unacceptable,” Bernstein's statement said. said the analyst.
Shares in Airbus, a rival to Boeing, rose 2.5% on Monday.
The European aircraft maker has lost market share since the two Boeing MAX crashes in 2018 and 2019 that killed nearly 350 people and grounded the MAX worldwide for 20 months. It's expanding.
Airbus is expected to announce that it delivered 735 planes last year, making it the world's largest aircraft maker for the fifth year in a row, overtaking Boeing.
Reuters reported last week that the number had reached the mid-730s, exceeding the company's target of 720.
Manufacturing or design issue?
Some analysts said the issue appeared to be a one-time manufacturing issue rather than a design issue that would be expensive to fix.
They also noted that the number of aircraft affected was small.
“The previous generation 737-900ER has the same approach to the door and has been flown millions of times with no incidents,” Bernstein added.
Boeing has delivered 214 of the 737 MAX 9 jets, representing 16% of the more than 1,300 MAX aircraft in service, and the 737 MAX 9 jets have regular doors instead of replacement panels. Most of them are still flyable.
Robert Spingarn, an analyst at Melius Research, said: “Sequential manufacturing issues could require design and manufacturing changes from Boeing and responsible suppliers, but at significant cost.'' That is not expected.”
However, investors will be watching for further action by the FAA and other regulators, especially with Chinese airlines recently returning all 737 MAX fleets to service following a grounding by regulators in China.
As for the potential liability costs for airlines as a result of Friday's accident, Citi analyst Jason Gursky used the RTX's recent engine problems as a template for calculations and estimated that Boeing could receive $2.3 million per day. Estimated to cost $.
Boeing's U.S.-listed stock was up 37% in 2023.
