Boeing Co shares fell nearly 10% in early trading on March 11, 2019, following the crash of an Ethiopian Airlines 737 MAX 8 that killed all 157 passengers and crew. This marked the second fatal accident involving the aircraft model in five months, after a Lion Air 737 MAX 8 crashed off Indonesia's coast in October 2018, killing 189 people.
The crash triggered immediate regulatory action as China's Civil Aviation Authority grounded nearly 100 Boeing 737 MAX 8 aircraft operated by domestic airlines. The agency stated it would coordinate with the U.S. Federal Aviation Administration and Boeing to ensure safety measures before resuming operations.
Boeing maintained that no new operational guidance was needed for the 737 MAX 8 at this stage, though analysts warned of potential volatility. Morgan Stanley analyst Rajeev Lalwani noted: "We anticipate heightened volatility in Boeing shares. Though it is early to draw conclusions, there may be concerns of disruption around safety, production, groundings, and/or costs." He reiterated a positive outlook for the company's stock.
Airline operators including Southwest Airlines and American Airlines affirmed their confidence in the aircraft model. Meanwhile, shares of CFM International, which manufactures the LEAP-1B engines for the 737 MAX 8, declined 1.6% on concerns about potential regulatory impacts.
