Boeing, which is a world-famous airplane maker is struggling to deal with problems as more and more information comes out about the 737 Max project. This plane, which is the workhorse of many airplanes is in trouble after two deadly crashes. These accidents and the fallout which followed after seriously affected the shares of Boeing.
The Boeing 737 is the company’s bestselling model. The 737 and its versions, along with narrow-body planes produced by Airbus are dominating the aviation industry.
It is important to mention that Boeing 737 is the only Boeing’s narrow-body airliner in production. Another interesting fact is that it is in production for more than 50 years. It will be hard for the competitors to sell as many narrow-body airplanes as Boeing.
Everything was going smoothly before the first accident, which triggering questions about the 737 Max and its problems. The aviation incident involving Ethiopian Airlines further complicated the situation for Boeing. As a result, all 737 Max planes are grounded, and this is a huge problem not only for Boeing but for its suppliers.
The shares of the aviation giant, the airlines which are using the 737 fleet and suppliers are decreasing due to the issues. Moreover, another scandal rocked an already scandal-ridden company after the new information became available. In 2016 a Boeing pilot raised concerns with his colleague about the flight-control system known as MCAS.
Aviation stocks on Monday
The shares of Boeing decreased on October 21. Boeing’s stock fell by 3.8%, and the price of one stock is $331.06. This is the worst result in two months. It is not surprising as mentioned-above Boeing 737 Max is the company’s best-selling model. Around 40% of its profit comes from selling 737 Max.
The suppliers are also under pressure due to ongoing problems. For instance, Spirit Aerosystems which is producing fuselages for the planes. Its shares fell by 4.8% on Monday.
The shares of General Electric, which makes engines for the 737 Max in cooperation French company Safran SA also struggled on October 21. The shares of GE decreased by 1.9%.
Airlines that are operating the 737 Max planes already lost millions of dollars. The stock of Southwest Airlines which operates only 737 fleets, declined by 0.5% on October 21.