Boeing shares take another hit as more countries ground 737 MAX 8 planes
Airplanes are becoming far too complex to fly- Trump
The European Union has grounded all Boeing 737 Max 8 and Max 9 jets, the latest entity to do so after the crash of an Ethiopian Airlines plane that killed 157 people on Sunday. That disaster came just five months after a similar Indonesian Lion Air jet plunged into the ocean, killing 189.
Prior to that move, a dozen countries suspended flights of the plane into or out of their airspace, including the United Kingdom, Turkey and Netherlands orders airspace closed for Boeing 737 MAX 8 airplanes on Monday.The Dutch government has ordered its airspace closed for Boeing (BA.N) 737 MAX 8 aircraft, press agency ANP reported, citing the country’s transportation minister.
A growing number of airlines are also putting a halt to flights of the new Boeing 737 Max 8, with some citing worried customers.
China, Indonesia, Malaysia, Iceland, Germany and the airlines TUI Airways, GOL Linhas Aereas, Aeromexico, Aerolíneas Argentinas, Cayman Airways, Comair Airways, Eastar Jet, Jet Airways, Mongolian Airlines, China Airlines, China Eastern, China Southern, Lion Air and Silkair have suspended the MAX 8 model. Poland have suspended the 737 MAX 8 and 9.
Meanwhile, a global team of investigators is picking through the rural Ethiopian crash site on Tuesday, searching for details on why the plane crashed shortly after takeoff. Answers could take months.
Reuters reports that Boeing Co’s stock took another beating on Tuesday as a raft of countries grounded its 737 MAX 8 aircraft, responding to a deadly crash in Ethiopia which has so far knocked $25 billion off the market value of the world’s largest planemaker.
The shares fell nearly 8 percent to $368.88 in mid-day trade, adding to a 5 percent decline on Monday and putting it on course for its biggest two-day percentage drop since June 2009.
Shares of U.S. airlines were broadly lower in midday trade, with the S&P 1500 airlines index off 1.5 percent. Southwest Airlines Co and American Airlines Group Inc, which analysts said were among the U.S. airlines most exposed to the Boeing aircraft model at issue, saw their shares fall more than 2 percent.
Boeing shares have delivered a total return - including reinvested dividends - of nearly four times the performance of the full index since U.S. stocks began rebounding from the 2007-09 financial crisis.
Boeing, however, has said it has no reason to pull the popular aircraft from the skies. It doesn't intend to issue any new recommendations about the aircraft to its customers.
Its technical team joined American, Israeli and other aviation experts in the investigation led by Ethiopian authorities.
Trump
US President Donald Trump has weighed in on the crashes of a new Boeing jet model by claiming that "airplanes are becoming far too complex to fly" and may be too susceptible to crashes.
In a tweet two days after the crash of an Ethiopian Airlines jet made by Boeing, the second such accident in five months, Trump tweeted that "pilots are no longer needed, but rather computer scientists from MIT", and manufacturers are "always seeking to go one unnecessary step further, when often old and simpler is far better".
While not proposing any alternatives, Trump claimed that "complexity creates danger", and added: "I don't know about you, but I don't want Albert Einstein to be my pilot. I want great flying professionals that are allowed to easily and quickly take control of a plane!"
US President Donald Trump tweeted: " "I don't know about you, but I don't want Albert Einstein to be my pilot."
The cause of the Ethiopian Airlines crash that killed all 157 passengers on Sunday has yet to be determined.
Airplanes are becoming far too complex to fly. Pilots are no longer needed, but rather computer scientists from MIT. I see it all the time in many products. Always seeking to go one unnecessary step further, when often old and simpler is far better. Split second decisions are....— Donald J. Trump (@realDonaldTrump) March 12, 2019
Sara Nelson, president of the Association of Flight Attendants, tweeted Tuesday that technology has made aviation safer through collaboration between manufacturers and crews. Nelson added that "mindless blurbs" from "someone who should know better don't help".
Crash investigators in Ethiopia and Indonesia are studying two fatal crashes in five months involving a new version of Boeing's 737 called the Max 8.
....needed, and the complexity creates danger. All of this for great cost yet very little gain. I don’t know about you, but I don’t want Albert Einstein to be my pilot. I want great flying professionals that are allowed to easily and quickly take control of a plane!— Donald J. Trump (@realDonaldTrump) March 12, 2019
The design of the engines prompted Boeing to change software for how the plane behaves, which risks exacerbating a dive if pilots aren't familiar with the change.
Boeing issued additional instructions for dealing with the change after the Indonesia crash and repeated the warning after the Ethiopia crash.
While the causes of both crashes remain under investigation, several countries have grounded the 737 Max 8, although not the United States.
Senators Mitt Romney and Elizabeth Warren called on the FAA to ground the Max 8 on Tuesday.
"Out of an abundance of caution for the flying public, the @FAANews should ground the 737 MAX 8 until we investigate the causes of recent crashes," tweeted Romney.
Warren, in a statement, said while the causes of the crashes are unknown, "serious questions have been raised about whether these planes were pressed into service without additional pilot training in order to save money".
Trump's comments came shortly after the United Kingdom and the Netherlands became the latest country to ground Boeing 737 MAX 8 planes, the US company's hottest-selling model.
Australia's Civil Aviation Safety Authority said late on Tuesday that it was banning airlines from using the planes in the country.
Trump's analysis of airplane problems drew ridicule from his critics.
"Hard to believe this guy bankrupted an airline," tweeted Cody Keenan, a speechwriter for President Barack Obama.
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