BEIJING: Boeing Co chief executive officer Dennis Muilenburg faces his biggest crisis yet following the second deadly crash of a 737 Max airliner, prompting airlines to ground the best-selling narrow-body and threatening to end Boeing’s three-year stock rally.
China ordered its carriers to ground all 96 of Boeing’s newest 737 model, while Indonesia said it would also halt flights after Ethiopian Airlines Flight 302 went down in a field shortly after takeoff Sunday, killing all 157 people on board.
While the flight recorders have now been recovered and must be analysed, the disaster bore similarities to the doomed Lion Air 737 Max that also crashed in October.
The 737 Max is Boeing’s most important aircraft type, generating almost one-third of the company’s operating profit and forming the backbone of many global airline fleets which use the model and Airbus’ competing A320 family on shorter routes.
Boeing sank 8.6% to US$386 in early US trading. That would would mark the biggest drop since January 2016, and pose a threat to the rally under Muilenburg, who’s overseen a tripling in the shares since taking over at at the biggest US exporter.
“Boeing has lost control of the timetable to provide the safe, reliable solution,” said Neil Hansford, chairman of the Australian consultancy firm Strategic Aviation Solutions. “The longer it goes, the more chance Boeing has of losing orders.”
The grounding in China, followed by the Indonesian air safety regulator’s order to halt 737 Max flights from Tuesday, raises the spectre of other countries following suit. South Korea began a special inspection of the aircraft, while in Europe, regulators said they’re in contact with their US counterparts as well as Boeing, but that it’s too soon to take action.
Investigators have recovered the cockpit voice and flight- data recorders, Ethiopian Airlines said on Monday, a significant step forward in piecing together what happened.
Chinese airlines accounted for about 20% of 737 Max deliveries worldwide through January, and further purchases of the Chicago-based planemaker’s aircraft are said to have been touted as a possible component of a trade deal with the United States. — Bloomberg
Did you find this article insightful?