boeing 737-800 plane operated by
ChinaEastern Airlines carrying about 130 people crashed Monday in southern China.
The plane wasn’t a MAX version of the 737 jet that was grounded worldwide between March 2019 and November 2020 following two deadly crashes within five months. But the tragic event is terrible timing for Boeing nonetheless. Another crash will only add to the perception that Boeing has some chronic problems while the company is trying to ramp up MAX deliveries and recertify the MAX for commercial service in China.
Boeing (ticker: BA) stock fell 4.5% in Monday trading, which weighed on the
Dow Jones Industrial Average
too. American depositary receipts of China Eastern Airlines (CEA) declined 6.6%. An ADR is, essentially, US-listed stock in a foreign company.
The Civil Aviation Administration of China confirmed the plane crash. “On March 21, 2022, a Boeing 737 of China Eastern Airlines lost contact over Wuzhou during the Kunming-Guangzhou flight. The plane has now been confirmed to have crashed. There were 132 people on board, including 123 passengers and 9 crew members,” the agency said. Barron’s used Google translate software to convert the statement to English from Chinese.
The number of casualties hasn’t been reported. boeing awning Barron’s that its “thoughts are with the passengers and crew of China Eastern Airlines Flight MU 5735. We are working with our airline customer and are ready to support them.
“Boeing is in contact with the US National Transportation Safety Board and our technical experts are prepared to assist with the investigation led by the Civil Aviation Administration of China.”
The website for China Eastern Airlines was shaded in black and white.
China Eastern operates about 130 737-800 jets and began taking delivery of the aircraft in 2009. Chinese media outlet Yicai said China Eastern will halt 737-800 flights after the crash, but the airline didn’t immediately respond to a request for comment about its 737-800 fleet.
The 737-800 is part of the so-called next generation, or NG family, of 737 jets introduced by Boeing in the late 1990s. Roughly 7,000 NG jets have been delivered over time.
The NG family of jets have different systems than those that were responsible for the MAX crashes. According to airsafe.com, the NG 737 jets have one of the best safety records of any plane. Boeing did not immediately respond to a request for comment about the data.
Cowen analyst Cai von Rumohr said Monday that the plane was delivered in 2015. He said that while it isn’t clear what brought the plane down, the leading cause of crashes is maintenance issues.
Overall, China Eastern operates about 750 jets from both Boeing and
Airbus (Air France).
Investors don’t appear to want to give Boeing the benefit of the doubt. There is some logic to that reaction.
Shareholders have had a tough go over the past few years. Boeing stock hit a record high in early 2019 after the first MAX crash involving a Lion Air flight in October 2018. Then came the second crash involving an Ethiopian Airlines flight, and the discovery of quality problems in the manufacturing process for 787 jets that have led to delays in deliveries of those plans. Shares are down roughly 60% from their all-time high of more than $446.
China Eastern Airlines is a MAX operator, with about 14 MAX jets in its fleet. China Eastern’s latest MAX delivery was February 2019. But the MAX isn’t fully re-certified to fly in China. None of the MAX jets operated by Chinese carriers are in commercial service.
The latest update about the MAX in China came on Boeing’s fourth-quarter earnings conference call in January. CEO Dave Calhoun said China was still preparing for a return to service.
Boeing expects a Chinese return to service for the MAX in 2022.
Write to Joe Woelfel at j[email protected] and Al Root at [email protected]
George is Digismak’s reported cum editor with 13 years of experience in Journalism