Boeing shares tumble 5% after deadly crash of popular 737 jet

, Magazine

Boeing shares fell more than 5 percent on Monday, a day after a new Ethiopian Airlines Boeing 737 MAX 8 plane crashed shortly after takeoff and killed all 157 people on board.

RT: Ethiopia plane crash Boeing 737

The incident was the second fatal crash of the manufacturer’s best-selling aircraft in less than five months.

China’s civil aviation regulator on Monday told domestic airlines to temporarily ground the Boeing 737 MAX 8 jets, a move later echoed by Indonesia, a rare measure. Cayman Airways and Ethiopian Airlines said they, too, would take the planes out of service temporarily. 

But the Federal Aviation Administration later on Monday said it does not have any reason to ground the planes, providing a vote of confidence to the planes whose recent crashes have rattled travelers as well as some carriers and some airline employees. U.S. airlines with this model of plane in their fleets, including American Airlines and Southwest Airlines, on Monday scrambled to assure customers who became worried after the two crashes that the jets are safe.

“External reports are drawing similarities between this accident and the Lion Air Flight 610 accident on October 29, 2018,” the FAA said in a notice to international airlines. “However, this investigation has just begun and to date we have not been provided data to draw any conclusions or take any actions.”

Ethiopian Airlines Flight 302 crashed shortly after takeoff for Nairobi from the Ethiopian capital Addis Ababa on Sunday. In a notice posted on its website, China’s aviation regulator said the crash was similar to that of Lion Air Flight 610, another Boeing 737 MAX 8, which went down in the Java Sea in October, minutes after departing Jakarta.

Boeing shares lost 5.3 percent to close at $400.01, recovering from a more than 13 percent decline earlier in the day. Even including the day’s decline, Boeing’s stock is up 24 percent so far this year, making it the biggest gainer in the Dow Jones Industrial Average.

Investigators on Monday were looking for clues in what brought down Ethiopian Airlines’ 4-month-old plane. The so-called black boxes, which contain flight data and cockpit voice recordings were recovered, the airline said.

In its notice to airlines early Monday, China’s aviation regulator said that the Ethiopian Airlines crash was similar to the Lion Air crash in October because it happened shortly after takeoff and that it has “zero tolerance” for safety hazards. Investigators, including a team from the U.S. National Transportation Safety Board, have just started their investigation and analysts warned it is too early to know the cause.

Boeing on said it was in contact with customers and regulators and did not have a reason to give airlines new guidance on the planes.

“Safety is our number one priority and we are taking every measure to fully understand all aspects of this accident, working closely with the investigating team and all regulatory authorities involved,” Boeing said in a statement. “The investigation is in its early stages, but at this point, based on the information available, we do not have any basis to issue new guidance to operators.”

The Boeing 737 MAX has been flying for less than two years and is a best-seller for the Chicago-based aircraft manufacturer. Boeing has delivered more than 350 MAX jets to airlines around the world since May 2017 and had more than 4,660 in its order book as of January, according to the company.