Boeing (BA) -) shares slumped lower in early Monday trading after the Federal Aviation Administration ordered some of the planemaker's 737 Max jets grounded following the blowout of an Alaska Air fuselage late Friday.
Alaska Airlines flight 1282, which was carrying 171 passengers, was forced to make an emergency landing in Portland shortly after takeoff Friday when the door plug of the 737 9 Max suddenly blew out.
No passengers were injured and the missing piece of the plane was eventually recovered by the National Transportation Safety Board, which is investigating the incident.
The FAA, meanwhile, has ordered the grounding of 171 Max 9 aircraft – including all those operating in U.S. markets – that feature the kind of door plug, made by Spirit AeroSystems (SPR) -), found on the Alaska Air jet.
The FAA is requiring immediate inspections of certain Boeing 737 MAX 9 planes before they can return to flight.
— The FAA ✈️ (@FAANews) January 6, 2024
Safety will continue to drive our decision-making as we assist the @NTSB’s investigation into Alaska Airlines Flight 1282. - @FAA_Mike pic.twitter.com/YsuQimg2pq
Boeing supporting NTSB inquiry into incident
“Safety is our top priority and we deeply regret the impact this event has had on our customers and their passengers. We agree with and fully support the FAA's decision to require immediate inspections of 737-9 airplanes with the same configuration as the affected airplane," Boeing said in a statement.
"In addition, a Boeing technical team is supporting the NTSB's investigation into the Jan. 5 accident," the statement added. "We will remain in close contact with our regulator and customers."
Boeing shares were marked 8.8% lower in early Monday trading to change hands at $227.25 each, a move that would trim the stock's six-month gain to around 6.5%. Spirit AeroSystems SPR shares, meanwhile, plunged 13.6% to $27.43 each.
Boeing CEO's efforts on reputation, growth
The 737 Max 9 grounding comes just as Boeing CEO Dave Calhoun looks to revie the aerospace giant's reputation and capitalize on a historic surge in aircraft demand from carriers around the world.
Boeing is also hoping to win permission to resume deliveries of its 737 Max aircraft to China, the world's biggest aircraft market, following its suspension of service in 2019 linked to fatal crashes in Indonesia and Ethiopia.
The workhorse jet, Boeing's most-profitable aircraft, resumed service last year, but new deliveries had been placed on hold by the civil aviation authorities as they investigate changes to the aircraft's aviation control system software.
Boeing, which hasn't posted a profit since June 2021, will report fourth-quarter earnings on January 31, with investors looking for a loss of 93 cents a share on revenue of just over $21 billion.
Boeing ended the third quarter with 252 of its 737 Max in inventory, with its order book rising by 224 planes, with just 10 cancellations.
The group's overall order book now stands at 5,172 planes, the highest since December 2019, valued at around $58 billion.
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