The Boeing crisis is hitting airline stocks and the market is overreacting

17 Mar 2019 06:59 PM

Boeing lost much of its value over the past week to a loss of more than 19% following the Ethiopian flight, killing 157 people on board. The Dow fell to 365.55 last week.

The plane used for that flight was the 737 MAX 8, one of Boeing's best-selling aircraft. The crash has raised concerns about the safety of the model because it comes less than six months after another fatal crash involving 737 MAX 8. Several countries, including China and Indonesia, have suspended all flights involving the aircraft and wiping over $25 billion of common market capitalization, a surprise reversal of the Dow Jones Industrial Average's best performance this year.

The airline's chief executive said his pilots were also reporting problems with controlling the plane before the crash.

Aviation authorities around the world have requested the grounding of aircraft over the past three days. The United States was the last country to allow aircraft to fly.

Boeing said it was still confident about the safety of the aircraft, but recommended closing itself "because of an abundance of caution and to reassure the public about the safety of the aircraft," according to a statement from the company.

"We support this proactive step," Chief Executive Dennis Moylenberg said in the statement. "We are doing our best to understand the cause of accidents in partnership with investigators, to deploy safety improvements and to help ensure that this does not happen again," Where the airline confirmed that it temporarily stopped the delivery of 737 new aircraft to customers after the crash of two aircraft in the past five months.

On Wednesday, the United States became the last major country to launch a 737 meter plane after an Ethiopian airliner crashed on Sunday, killing 157.


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