Boeing shares had the biggest plunge in over a year on Monday, losing a whopping $13.5billion off its value in the wake of the mid-air Alaska Airlines blowout that almost ended in catastrophe.
Terrified passengers were left fearing for their lives on Friday after an emergency exit used as a cabin window fell off the Alaskan Airlines flight from Portland to California at 16,000 feet. Federal regulators swiftly grounded 171 Boeing 737 Max 9 planes on Saturday.
The stock plunge came shortly before the Federal Aviation Administration said on Monday airlines could begin safety inspections of over 100 Boeing 737 Max 9 grounded planes.
The inspection reportedly already has produced concerning findings, with United finding loose bolts on plug doors in its planes, according to The Air Current.
The near disaster saw Boeing Corp shares plummet 8.6 percent – from 248 to 228 – between Friday evening and Monday morning. The stock continued to plunge after the market opened, reaching 226 – and analysts warned it is expected to continue falling until the aircrafts are back in service.
Boeing shares dropped nearly 10 percent in pre-market trading following the FAA’s grounding of its 171 Boeing 737 Max 9 aircraft after catastrophe almost struck on an Alaska Airlines plane
From Friday evening to Monday morning shares of Boeing fell 8.6 percent – from 248 to 228
An emergency exit used as a cabin window blew out of the Alaskan Airlines flight from Portland to California at 16,000 feet
Meanwhile Alaska Air’s shares fell 4.3 percent, while United Airlines shares, the other U.S. carrier that operates the jet, dropped 2.4 percent.
Spirit AeroSystems, which manufactured and initially installed the fuselage part on the brand new MAX 9 jet in question, was down 20.8 percent, deepening the gloom around the supplier recently recovering from a string of quality problems.
There were no serious injuries from Friday’s terrifying air failure, but passenger’s belongings including phones flew out the aircraft
Wall Street analysts viewed the accident as a temporary setback to Boeing, but some took a dim view of a series of quality problems related to the 737 MAX family of aircraft.
Alaskan Airlines quickly made the move to ground planes after the near-disaster in Portland on Friday, and CEO Ben Minicucci said in a statement the aircraft will only go back into its fleet after clearing precautionary maintenance procedures, which he expected to be ‘in the next few days.’
In a statement shared to X on Saturday, the regulator said it is requiring immediate inspections of certain jets before they can return to the skies.
The FAA’s decision to ground the fleet of Boeing 737 MAX 9’s comes as several airlines and regulators have taken similar steps.
Boeing competes with Airbus, which has expanded its market share since two Boeing MAX crashes in 2018 and 2019 that killed nearly 350 people and led to the MAX’s worldwide grounding for 20 months.
Airbus shares were up more than 1 percent early on Monday. The company this week will announce that it delivered 735 planes last year, beating Boeing to remain the world’s largest plane maker for the fifth year in a row, according to industry sources.
There were no serious injuries from Friday’s terrifying air failure, but passengers’ belongings including phones flew out the aircraft.
The flight that was set out to arrive at Ontario International in California turned back around after the plug door came off on Friday night
One of the cellphones, an iPhone, was found by video game designer Sean Bates who said that he picked it up while out for a walk. In a series of posts on X, Bates said the intact phone was still in airplane mode and had half of its battery life left.
According to aviation outlet The Air Current, the aircraft involved in the incident had come under scrutiny by officials just a day before the window blew out.
The outlet claimed that on January 4, an intermittent warning light appeared as it taxied to a terminal from a previous flight, which led the airline to remove it from extended range operations (ETOPS). Later that same day in a separate flight, the warning came back on.
The Boeing 737 MAX 9 jet involved in the incident had reportedly only gone into service in November 2023, and was practically new by aviation standards after reportedly undergoing less than 200 flights before the incident.
The NTSB began an investigation that is likely to last months and focus on the paneled-over exit door that blew off. The so-called door plug is installed on some jets that have fewer seats instead of an emergency exit panel. The jets ordered grounded by the FAA all have those panels installed.
Investigators said Sunday they had found the door plug, and hoped it would provide physical evidence of what went wrong.
This image from video provided by Elizabeth Le shows passengers near the damage on an Alaska Airlines Boeing 737 Max 9, Flight 1282, which was forced to return to Portland International Airport on Friday, Jan. 5, 2024. (Elizabeth Le via AP)
The NTSB said the lost door plug was recovered Sunday near Portland, Oregon, by a school teacher — for now, known only as Bob — who discovered it in his backyard and sent two photos to the safety board. Investigators will examine the plug, which is 26 by 48 inches and weighs 63 pounds, for signs of how it broke free.
Alaska Airlines, which has 65 Max 9s, and United, with 79, are the only U.S. airlines to fly that particular model of Boeing’s workhorse 737. United said it was waiting for Boeing to issue a “multi-operator message,” which is a service bulletin used when multiple airlines need to perform similar work on a particular type of plane.
HISTORY OF SAFETY ISSUES
It is the latest setback for Boeing’s best-selling plane, which has seen a series of concerning safety incidents that have damaged the company’s reputation over the last years.
A Max 8 jet operated by Lion Air crashed in Indonesia in 2018, and an Ethiopian Airlines Max 8 crashed in 2019. Regulators around the world grounded the planes for nearly two years while Boeing changed an automated flight control system implicated in the crashes.
Boeing has estimated in financial reports that fallout from the two fatal crashes has cost it more than $20 billion. It has reached confidential settlements with most of the families of passengers who died.
Federal prosecutors and Congress questioned whether Boeing had cut corners in its rush to get the Max approved quickly, and with a minimum of training required for pilots.
In September, 2019, Boeing fired the top executive of its commercial airplanes division, Kevin McAllister, a year before ousting former CEO Dennis Muilenburg.
In 2021, Boeing settled a criminal investigation by agreeing to pay $2.5 billion, including a $244 million fine. The company blamed two relatively low-level employees for deceiving the Federal Aviation Administration about flaws in the flight-control system.
After a pause following the crashes, airlines resumed buying the Max. But the plane has been plagued by problems unrelated to Friday’s blowout.
In January 2020, Boeing suspended 737 production, its biggest assembly-line halted in more than 20 years, before resuming it at a ‘low rate’ that May.
In September 2020, an 18-month investigation by a U.S. House of Representatives panel found Boeing failed in its design and development of the MAX as well as its transparency with the FAA, and that the FAA failed in oversight and certification.
That December Congress passed legislation to reform how the FAA certifies new airplanes, including requiring manufacturers to disclose certain safety-critical information to the FAA.
In January 2021 the European Union Aviation Safety Agency approved the MAX’s return to service in Europe but in March China’s aviation regulator said major safety concerns with the MAX needed to be ‘properly addressed’ before conducting flight tests.
The next month Boeing halted 737 MAX deliveries after electrical issues re-grounded part of the fleet.
In November, current and former Boeing company directors reached a $237.5 million settlement with shareholders to settle lawsuits over safety oversight of the 737 MAX.
Questions about components from suppliers have held up deliveries at times. Last year, the FAA told pilots to limit use of an anti-ice system on the Max in dry conditions because of concern that inlets around the engines could overheat and break away, possibly striking the plane. And in December, Boeing told airlines to inspect the planes for a possible loose bolt in the rudder-control system.
A passenger on a Southwest Airlines jet was killed in 2018 when a piece of engine housing blew off and shattered the window she was sitting next to. However, that incident involved an earlier version of the Boeing 737, not a Max.