Boeing stock plunges as Alaska Airlines incident adds to woes

Shares in Boeing fell as much as 8.6% in pre-market trade on Monday, wiping nearly $13 billion off the company’s stock market value, as investors grow worried about damage to its business after a piece of fuselage on a Boeing 737 Max 9 blew out mid-flight.

The Alaska Airlines flight, which had been travelling from Portland, Oregon, to Ontario, California, on Friday, made an emergency landing after part of the wall of the aircraft detached itself, leaving a gaping hole in the side of the plane.

The Federal Aviation Administration on Saturday ordered all Boeing 737 Max 9 aircraft to be grounded until they can be carefully inspected. The order applies to 171 planes around the world, and airlines in Turkey and Panama have also grounded flights.

Aviation trial attorney Robert Clifford told CNN the incident will have reputational repercussions for Boeing and the company will likely be on the hook to pay airlines for lost revenue.

The incident is the latest in a long string of problems for Boeing. Since the grounding of the 737 Max in March 2019, following two crashes that killed 346 people, Boeing’s (BA) financial losses have mounted.

The company reported an annual loss for four straight years from 2019 to 2022, and logged a $2.2 billion net loss for the first nine months of last year. Its full-year results for 2023 are due at the end of January.

Boeing’s share price has recovered since the pandemic threw the global airline industry into turmoil but is still 34% down from its peak in February 2020.

In comparison, shares in Airbus, Boeing’s European rival, are trading above their pre-pandemic peak, and were up 2.2% from their previous close in Paris by 6.19 a.m. ET on Monday.

This is a developing story and will be updated.