Boeing shares tumble as investigators recover part of plane panel

Shares of Boeing plunged early Monday after an airplane panel blew out mid flight, reviving safety questions at a time when the company hoped to recover its reputation. The more than eight percent drop in Boeing stock pushed the Dow index into the red as investors digested the latest incident involving the 737 MAX and whether it will derail Boeing's turnaround after a lengthy financial slump.

On Friday, Alaska Flight 1282 departed from Portland International Airport and was gaining altitude when the cabin crew reported a "pressurization issue", according to the Federal Aviation Administration (FAA), with the plane quickly returning to Portland. Video images of the incident, which showed a gaping hole in the side of the plane, air rushing through the cabin, oxygen masks dangling and travelers observing city lights below them through the opening, were seen around the world.

Regulatory bodies swiftly grounded some versions of Boeing's 737 MAX 9 jet pending inspections after the emergency, which miraculously saw no major injuries. National Transportation Safety Board (NTSB) chair Jennifer Homendy reported that a teacher she identified as "Bob" found the door plug, a cover panel used to fill an unneeded emergency exit, from the Alaska Airlines flight in his Portland back yard over the weekend.

Homendy said it was "very, very fortunate" that the incident had not ended in tragedy. It is not yet clear what went wrong on the flight, but shares of Boeing sank early Monday, along with supplier Spirit AeroSystems, which builds the fuselage for the MAX. Near 1515 GMT, Boeing was down 8.1 percent, Spirit dropped 12.5 percent and Alaska lost 3.8 percent.

The incident is the latest setback for the manufacturer, particularly over the 737 MAX. The worst were two crashes—of a Lion Air flight in October 2018, and an Ethiopian Airlines flight in March 2019—that caused the deaths of 346 people in total and triggered the grounding of all 737 MAX planes for nearly two years.

They both occurred on 737 MAX 8 planes, which are slightly smaller than the MAX 9. After the Alaska Airlines incident, the FAA said that around 171 Boeing 737 MAX 9 worldwide would be grounded for inspections, with each check taking four to eight hours. US based Alaska and United Airlines fly the largest number of MAX 9 planes of any carrier, and said Sunday they had grounded their aircraft for inspection.

Other airlines with smaller MAX 9 fleets, including Indonesia based Lion Air, said they did the same. The plane manufacturer late Sunday said its chief executive Dave Calhoun has set an all employee safety meeting for Tuesday at the company's factory in Washington state. Aviation analysts said the issue appeared to be a quality control problem.

The latest mishap could stem from the manufacturing of the door plug that came loose or bolts that were supposed to secure it, said Scott Hamilton of the specialized aviation news outlet Leeham News. "If it's indeed a quality assurance issue, whether it's in Spirit or at Boeing, I would say it's more than likely a narrow, quality assurance issue," he said, referring to Spirit Aerosystems, Boeing's main subcontractor.

"I think this is more of a one off anomaly than I would a systemic issue," he said. But the incident could further delay Boeing's plan to ramp up production on the MAX, which is central to its financial turnaround. Boeing has reported losses the last four years. In October, Boeing executives said they were focused on increasing output to 38 MAX planes per month.

The aviation giant has said the production could eventually reach 60 per month, but that the ramp up depends on bolstering the supply chain. © 2024 AFP.