Boeing 737 MAX Flights Grounded Following Fatal Crash

Following the two recent Boeing (NYSE: BA) 737 flight crashes, many countries have now moved to ground the 737 MAX aircraft. Boeing shares continued to fall lower as they were down 1.2% on Wednesday.

On Sunday, a Boeing 737 MAX 8 aircraft operated by Ethiopian Airlines fatally crash, killing all 157 people on board. In late October, the same aircraft flown by Lion Air crashed off the coast of Indonesia.

Now, countries such as Canada, China, Indonesia, Singapore, and the U.S. have all grounded specific 737 MAX flights until the safety of the airplane is controlled. Other countries have also banned the 737s from entering into their airspace.

Boeing’s 737 MAX series flights are its most popular and fastest selling aircraft. The Company has received nearly 4,700 orders from more than 100 customers worldwide, according to Boeing’s website.

The two crashes have led many to believe that there could potentially be a flaw with the aircraft instead. However, other aviation experts argue that it simply could have been a costly pilot error.

Regardless, with many Boeing flights now grounded and countries barring flights from entering into the airspace, travelers could see delayed or even cancelled flights for the meantime. Most of Boeing’s 737 MAX series of aircrafts fly internationally, but still fly domestic flights.

“Most airlines do not have the capacity to use other planes to carry extra passengers; airlines do not typically have an extra aircraft for every flight,” said Henrik Zillmer, Chief Executive Officer of AirHelp, a company that facilitates passenger compensation for delayed or cancelled flights, via MarketWatch. “If airlines act fast and look ahead, they could avoid further chaos by potentially reassigning flights. However, without proactive action, this situation could lead to cancelled or overbooked flights, and ultimately, boarding denials.”

China’s grounding of 737 MAX flights heavily impacts Boeing. Chinese airlines have 97 of the 737 MAX flights in service, which accounts for more than a quarter of the total operating in the world, according to FlightGlobal.

In the U.S., airlines had mixed reactions after President Donald Trump’s decision to ground the flights.

Southwest Airlines (NYSE: LUV) operations could possibly be more heavily impacted as opposed to other U.S. airlines. Southwest has 34 MAX 8 flights in service, which is more than any other American carrier. However, the airline is aiding customers in re-booking new flights with another aircraft.

United Airlines (NASDAQ: UAL) said that around 40 flights operate throughout the day on the MAX flights. However, United does not expect the grounding of 737s to impact its operation significantly, but the airline is still working with travelers to re-book flights as well.

2 Comments
  1. Adam Smith 4 days ago
    Reply

    $BA looking like a buy. Waiting on signal.

  2. Ophir Gottlieb 4 days ago
    Reply

    To me, $BA is a great trade just waiting to make a great return. It will sit range bound until the issue is resolved & the bills are added up. Keep in mind when the introduced the 737 the had some crashes. This will work itself out so long as it’s not a design flaw

Leave a Comment