Boeing’s stock dropped on Monday following the fatal crash-landing of a 737-800, a widely used model, in South Korea on Sunday. The aircraft, operated by Jeju Air, crashed at Muan International Airport, hitting a barrier and bursting into flames. This crash taken life of 179 of the 181 people onboard.
Shares of Boeing fell over 4% in premarket trading in New York.
The South Korean Ministry of Transportation announced it would conduct inspections on the country’s 101 Boeing 737-800 aircraft, including those operated by Jeju Air. These inspections began Monday and are scheduled to conclude by Friday. Deputy Transport Minister Joo Jong-wan stated that the inspections would focus on the maintenance records for key systems such as engines and landing gear.
Boeing expressed in a statement on Sunday that it was in contact with Jeju Air and was ready to help. The crash also impacted Jeju Air’s stock, which fell 8.7% by the close of trading on Monday in Seoul.
While Myles Walton, an analyst at Wolfe Research, stated that the cause of the accident could be linked to several factors, he noted that issues with workmanship or design were unlikely. He also cautioned that, despite the 737-800’s strong safety record, accidents in the commercial aerospace sector, though rare, present significant risks for manufacturers like Boeing.
Boeing’s stock has dropped nearly 30% this year due to challenges such as labor disputes, quality control concerns, mounting debt, and supply chain disruptions. Earlier in 2024, a panel detached from a 737 Max aircraft during a flight with Alaska Airlines, reigniting safety concerns regarding Boeing’s planes following two deadly crashes involving the Max model five years ago. Additionally, 33,000 Boeing workers went on strike for two months starting in September. In response, CEO Kelly Ortberg, who took over this summer, revealed plans to restructure the company, including cutting approximately 17,000 jobs, or 10% of Boeing’s global workforce.
Despite the recent setback, aviation experts emphasized that the 737-800 model has an excellent safety record. It has been in service for over 25 years and is used by nearly 200 airlines globally, with thousands of these planes currently in operation. The 737-800 accounts for approximately one in seven passenger aircraft worldwide, according to aviation data firm Cirium.
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