Boeing Shares Drop Further After US Aviation Regulator Opens Investigation

Shares in Boeing BA fell again on Thursday after the U.S. Federal Aviation Administration (FAA) said it was investigating the aerospace company following a midair blow-out of a fuselage panel on one of its jets.

What Happened: Boeing’s share price fell 1.7% on Thursday, extending its losses since Friday, Jan. 5 to nearly 10%.

The downfall stems from the negative press and scrutiny Boeing is receiving due to its fleet of 737 Max 9 jets, and news that some carriers — including Alaska Airlines ALK — will start canceling flights.

The FAA said on Thursday it was investigating to determine if Boeing had failed to ensure that completed aircraft conformed to its approved designs and were in a condition for safe operation in compliance with FAA regulations.

“This incident should have never happened, and it cannot happen again,” the regulator said in a statement.

It added: “Boeing's manufacturing practices need to comply with the high safety standards they're legally accountable to meet.”

Also Read: Airline Stocks Cleared For Takeoff In 2024, But Economic And Consumer Confidence Clouds Gather

Boeing Boss Shaken

This echoed comments made by Boeing CEO Dave Calhoun on Tuesday, saying he’d been “shaken to the bone” by the events that unfolded on Friday night, and pledging: “This can never happen again.”

Global regulators grounded all 171 Max 9 jets with the same specifications on Saturday. An Alaska Airlines flight made an emergency landing following the blow-out of a “plug” type passenger door.

As airline operators and representatives of the manufacturer carried out subsequent safety checks on the fleet, Alaska Airlines technicians reported some “loose hardware” was visible on some aircraft in the relevant area.

Meanwhile, United Airlines UAL, the only other U.S. airline to operate the Max 9 jets said on Monday that its technicians had discovered bolts that needed tightening on several panels.

Reputational Damage

The 737 Max family of mid-sized passenger jets has caused Boeing much reputational damage.

Fatal air crashes of Max 8 aircraft in October 2018 and March 2019 caused the entire fleet to be grounded. It returned to service in 2021, two years later.

On Wednesday, transportation secretary Pete Buttigieg said the Max 9 would not return to service “until it was safe” and that he couldn’t put a timeline on when he expected this to be.

Now Read: Boeing 737 Max 9 Groundings Trigger Stock Turbulence For Carriers As Regulators Order Safety Checks

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