Boeing Shares Drops After 737 Max Grounded by Many Countries
United States (US)' Wall Street closed at its lows of the session on Thursday, with the Dow posting a whopping 10 percent drop to 2,352, rivaled only by the crashes of 1929 and 1987 - Photo: Special

JAKARTA (TheInsiderStories)Boeing Company’ stock price dropped significantly after number of countries grounded 737 MAX 8 jets after Ethiopian Airlines crashed left 157 dead. The American aviation multinational giant lost over than US$13 billion in market value since last week.

The company’ stock declined sharply from $420 a share on Friday (13/08) to about $380 as on Tuesday morning. The losses set the stock for its biggest two-day percentage drop since June 2009.

Indonesia and China were the first ordered to ground their Boeing 737 Max air crafts in the wake of the Ethiopian Airlines disaster. Malaysia, Australia, Singapore and the United Kingdom have since followed suit. Then followed by European Union that they would be closing their airspace to the Boeing planes.

Several airlines in North Africa, Latin America and Asia have decided to ground flights as an investigation into the crashed continues. In total, at least 27 airlines have grounded their Max 8 planes.

Boeing shares have delivered a total return – including reinvested dividends – of nearly four times the performance of the full index since United States’ stocks began rebounding from the 2007 – 2009 financial crisis.

The single-aisle 737, the world’s most-sold commercial aircraft, is central to Boeing’s future. The MAX line is the fastest-selling jetliner in the company’s history with more than 5,000 orders booked and a backlog valued at nearly $500 billion at list prices.

Boeing notes that Lion Air has ordered 201 units of the 737 Max type since the first order was made on Feb. 22, 2012. Until now, Boeing has sent 13 Aircraft units to the local flight carrier.

Besides Lion Air, in the Asian region there are several dozen low-cost airlines to become Boeing customers for this 737 Max series. Call it Spice Jet Ltd., from India and also China Southern Airlines Company. The Boeing 737 Max variant is a competitor of the Airbus SE A320 Neo jet type.

The US will mandate that Boeing implement design changes by April, but said the plane was airworthy and did not need to be grounded. Boeing defended its aircraft and said it has “full confidence in the safety of the Max.” Safety experts say it is too early to speculate on what caused Sunday’s crash and black box recorders were yet to yield the cause.

Investigators from the US have traveled to Ethiopia to assist with the crash inquiry. The so-called black box, which includes voice and data recorders, was recovered on Monday and will be reviewed so investigators can gain a better understanding of what occurred in the minutes before the crash.

Written by Lexy Nantu, Email: