Dow Jones Aircraft Manufacturer Stock Price boeing News about 737 Max deliveries in China and analyst downgrades weighed on Boeing shares, which fell on Tuesday (BA).
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China Southern Airlines is reportedly strengthening safety inspections for its new Boeing 737 MAX aircraft, which the airline plans to deliver as early as this month, The Wall Street Journal reported. The China Southern Airlines jets on order from Boeing reportedly include versions of the 737 Max aircraft and the 737 Max 9 model, which was grounded pending safety inspections following an explosion in the aircraft’s fuselage panel. are said to be different. alaska airlines (ALK) Jet on January 5th.
The move would ostensibly postpone the launch of an unspecified number of jets scheduled to fly to China this month. Chinese authorities also require safety inspections of all 737 Max aircraft operating in China. According to a report in the Wall Street Journal, the China-based airline currently does not have any 737 Max 9s in its fleet. Still, it’s unclear how long the new testing protocols will take and how long they will take to be delivered.
737-9 Max Emergency Landing
The Alaska Airlines accident ended with the plane depressurizing during the flight and the plane landing safely, with only minor injuries to passengers. The panel torn from the aircraft was a 737 Max 9, and was reportedly a plug panel used to cover the emergency exit door on smaller planes.
The Federal Aviation Administration issued an order on Jan. 6 requiring safety inspections of plug panels on all 737 Max 9 aircraft in the U.S. fleet, and Boeing on Monday issued a staff memo detailing additional inspections of its 737 production line. The Wall Street Journal reported that it was sent. The company also sent staff to inspect things such as door panel manufacturing. Spirit Aero Systems (SPR) supplies airframe components for the 737 Max 9.
On January 8th, united airlines (UAL) reported finding loose bolts and other parts during a review of the 737-9 Max door plug.
China is a key market for Boeing, expected to account for 20% of global aircraft demand over the next 20 years, according to Boeing forecasts. The new 737 Max model is key to restoring Boeing’s business in the country, following a global grounding of the aircraft model following fatal crashes in Indonesia and Ethiopia in 2018 and 2019.
Boeing stock
Wells Fargo downgraded Boeing shares from overweight to equal weight early Tuesday following the China news and Monday’s company update. The FAA inspection audit opens a “whole new can of worms” for Boeing and “significantly” increases the risk of impacting deliveries, the company said in a research note. Wells Fargo lowered Boeing’s price target from $280 to $225.
Boeing shares fell 7.9% on Tuesday, leading the Dow Jones Industrial Average’s decline on the news. Boeing fell nearly 12.6% last week following the Alaska Airlines incident and FAA inspection procedures.
Last week’s selloff triggered automatic selling rules as Boeing fell more than 8% below a cup-based buy point following its December breakout.
Supplier Spirit fell 4.4% on Tuesday, after its stock fell 3.5% in pre-market trading.
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