Boeing Shares Plunge Nearly 8% Amidst Safety Concerns, Federal Scrutiny

Boeing faced another significant setback as its shares plummeted by nearly eight percent, casting a shadow on the Dow, following a recent mid-air safety incident that has triggered heightened federal scrutiny.

The incident involved a Boeing 737 MAX operated by Alaska Airlines, which executed an emergency landing after a “door plug” panel blew out during flight. Fortunately, there were no fatalities or serious injuries reported.

According to AFP, the Federal Aviation Administration (FAA) initiated a safety probe into the January 5 incident, marking the first major in-flight safety issue on a Boeing plane since the fatal 2018 and 2019 737 MAX crashes that led to a nearly two-year grounding of the aircraft.

In response to the recent incident, US regulators grounded 171 Boeing 737 MAX 9 planes with a similar configuration as the one involved.

This move sparked concerns among investors, causing Boeing shares to experience a sharp decline. Wells Fargo, in an equity analyst report, highlighted the challenges Boeing faces, stating that the FAA audit “opens a whole new can of worms.” The report also noted that Boeing’s recent track record and the FAA’s heightened scrutiny make the odds of a clean audit appear low.

Wells Fargo further downgraded Boeing shares, citing the anticipation of slower deliveries of the 737 MAX in 2024. The report estimated that this would result in a reduction of $2 billion (RM9.4 billion) in free cash flow compared to previous analyses.

Amidst these challenges, United Airlines has extended the cancellation of services on Boeing 737 MAX 9 jets through January 17.

Meanwhile, Boeing has named retired Navy admiral Kirkland Donald as an advisor to Chief Executive David Calhoun, tasking him with conducting a comprehensive review of Boeing’s quality programs and practices.

Previous articleFWD Takaful Teams Up With AEON Insurance Brokers To Address Motorcyclist Protection Gap In Malaysia
Next articleKPDN Has Eye On Online Cooking Oil Scam Activities


Please enter your comment!
Please enter your name here