News World Boeing shares tumble as US reassures carriers over 737 airworthiness

Boeing shares tumble as US reassures carriers over 737 airworthiness

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Countries around the world have grounded Boeing 737 Max jets. Photo: Getty
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Shares in Boeing, the world’s largest aircraft manufacturer, tumbled in Wall Street trading overnight after its best-selling plane was involved in  its second deadly crash in just five months.

Boeing tumbled 10.7 per cent in overnight trading before closing down 5.3 per cent at US$400.01 ($355) on Monday in the heaviest trading slump since 2013.

Ethiopia Airlines Flight 302 bound for Nairobi crashed minutes after take-off on Sunday, killing all 157 aboard. The crash raised questions about the safety of the 737 Max 8, which also crashed and killed 189 people in Indonesia in October.

American Airlines Group and Southwest Airlines, who continue to use the 737 Max 8, were trading down between 0.3 per cent and 2.5 per cent overnight.

“Boeing, without any question, is going to be the theme for the Dow index, given its enormous weighting, but I don’t see a spillover to any other indexes except airlines,” Randy Frederick, vice-president of trading and derivatives for Charles Schwab in Austin, Texas, told Reuters.

The sell-off of Boeing shares came as the US transport regulator, the Federal Aviation Administration, demanded design changes to the Boeing 737 Max 8.

In a Continued Airworthiness Notification to the International Community issued on Tuesday morning (ADST), the FAA said Boeing must complete enhancements to the plane’s flight control system by April.

However, the authority said it still considered the Max 8 to be airworthy.

Earlier, US Transportation Secretary Elaine Chao said her department would “take immediate action” if regulators identified any safety issue after the Ethiopian Airlines crash.

“I want people to be assured that we take these incidents, these accidents very seriously,” she said.

FAA officials have traveled to Ethiopia to assist the investigation into Flight 302.

Canada’s transport minister said he would not hesitate to act once the cause of the crash was known.

On Monday, FAA chief Dan Elwell said the notification basically “informs the international community where we are and (gives) sort of … one answer to the whole community”. He dubbed it a “broadcast to the world about where we are”.

Paul Hudson, the president of and a member of the FAA Aviation Rulemaking Advisory Committee, said the Max 8 should be grounded.

“The FAA’s ‘wait and see’ attitude risks lives as well as the safety reputation of the US aviation industry,” Mr Hudson said.

The National Transportation Safety Board and the FAA are both at the crash site in Ethiopia, Ms Chao said.

The 737 line, which has flown for more than 50 years, is the world’s best-selling modern passenger aircraft and considered one of the industry’s most reliable.

China ordered its airlines to ground the jet, a move followed by Indonesia and Ethiopia.

Other airlines, from North America to the Middle East, kept flying the 737 MAX 8 on Monday after Boeing said it was safe.

According to the FAA, there are 387 Max 8s in service with 59 operators globally. Of those, 74 planes are flying in the US.

Boeing rolled out the fuel-efficient Max 8 in 2017 as an update to the already redesigned 50-year-old 737, and had delivered 350 MAX jets out of the total order tally of 5011 aircraft by the end of January.

-with AAP