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Boeing’s Shares Decline as Investors Evaluate the Alaska Airlines 737 Setback

The value of Boeing’s stocks plummeted significantly on Monday, during the initial trading session subsequent to a segment of the body of one of its 737 Max 9 planes blowing out on an Alaska Airlines flight on Friday night.

Boeing’s stocks plunged by approximately 8 percent, and Spirit AeroSystems, the manufacturer of the door plug that tore from the aircraft, witnessed its stocks fall by about 11 percent by the close of Monday.

During an Alaska Airlines flight departing from Portland, Ore., the mid-cabin door plug was lost midair, exposing passengers to strong winds and necessitating an emergency landing. None of the 171 passengers and six crew members on board incurred serious injuries.

The Federal Aviation Administration has instructed U.S. airlines to ground specific Boeing 737 Max 9 planes configured similarly to the one utilized by Alaska. The National Transportation Safety Board is probing the incident.

United Airlines and Alaska Airlines, the primary operators of the Max 9, canceled over 350 flights on Monday, constituting 8 percent of United’s schedule and 20 percent of Alaska’s, according to FlightAware. United’s stocks increased by about 2.8 percent on Monday, while Alaska’s declined by 0.2 percent, recuperating from earlier losses in the day.

Other airlines with Max 9 aircraft in their fleets are located outside the United States, such as Copa Airlines of Panama, Turkish Airlines, and Icelandair. These planes may not be subject to the same regulatory action. The European Union’s aviation safety agency announced on Monday that the Max 9 jets operating in Europe were not grounded as they had a different configuration than the Alaska Airline jet that made an emergency landing.

Boeing stated early on Monday that it had issued guidelines for airlines to conduct inspections of the plane.

In a statement on Monday, Spirit AeroSystems reiterated its commitment as a partner with Boeing on the 737 program and its ongoing collaboration with them on this matter.

Another variant of the Max, a 737 Max 8, was implicated in two accidents resulting in hundreds of fatalities in 2018 and 2019, leading to its global grounding. Additionally, last month, Boeing advised airlines to inspect over 1,300 delivered Max aircraft for a potential loose bolt in the rudder-control system.

While investors were unsettled, few analysts anticipated sustained financial ramifications for Boeing and others, based on their observations of the response from regulators and the companies following the Alaska Airlines incident.

Analysts at Barclays pointed out that the grounding of the jets would only have a “minor financial impact” as the Max 9 fleet was relatively small, at 215 planes, with 144 operating in the United States.

The Max 9 represents merely 2 percent of Boeing’s order backlog, according to the analysts. Alaska has 27 of the Max 9 planes on order, and United has seven.

Analysts at Williams Blair regarded the decline in Boeing’s stocks as an opportunity for investment. They wrote, “While the Alaska Airlines door plug incident was frightening, we do not believe it will have a significant financial impact, unless another incident occurs after the aircraft returns to service.”

A research report from Morningstar acknowledged that the impact would not be “substantial,” but highlighted that “the dramatic nature of the flaw will once again raise questions regarding Boeing’s product oversight among customers, regulators, and the flying public.”

Mark Walker contributed reporting.

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