Boeing Co. experiences a lot of pressure after China and Indonesia decided to ground the flights of its newest 737 jet following a second deadly plane crash that involves the jet. The United States plane maker's share significantly dropped in early trading after the Ethiopian Airlines Flight 302's crash that killed 157 people on board.
Africa's biggest carrier also decided to end using the 737 Max 8 planes because of the event. China recently released an order to cancel the flights of all 96 of the aircraft. According to the air safety regulator of Indonesia, they will halt the flights that involve the Boeing planes starting on Tuesday.
The last plane crash where the 737 Max was involved was compared to the tragedy of the Lion Air crash in Indonesia that killed 189 individuals. The crash pushed the United States-based company to a step closer to a crisis. The plane model generates nearly one-third of Boeing's operating profit. The halt of its operations in China raised concern over other countries. South Korea started a special inspection of the aircraft.
A former commercial pilot and an aviation safety consultant based in the Southern India city of Chennai, Mohan Ranganathan, said that the B737 Max design is dangerously flawed and there is a definite similarity between Lion Air and Ethiopian Airlines Max crashes.
European regulators also announced that they are in contact with their United States counterparts and the Chicago-based planemaker. They, however, said that it is still too early to take action. In Early United States trading, the company sank by 9.6 percent to $382.11. The market share of the company's engine maker for the Max, Safran SA, fell by 1.8 percent as of 11.15 a.m. in Paris.
According to Boeing's website, Chinese airlines contribute more or less 20 percent of the 737 Max deliveries in the world as of January. The data also showed that the China Southern Airlines Co. has 16 737 Max. it has also placed an additional 34 planes. The China Eastern Airlines Corp. has 13 Boeing planes. Air China Ltd. owns 14 Boeing 737 Max planes. The Hainan Airlines Holdings Co. and Shandong Airlines Co. also bought the Boeing Max planes.
Bloomberg Intelligence estimated that the single-aisle 737 Max can generate not less than $30 billion in annual revenue due to the rise of factory output to a 57-jet monthly pace this year. According to a preliminary report on the crash of the Lion Air's 737 Max, pilots struggled to maintain control following an equipment malfunction.
