A Boeing 737-800 crashed in China Monday. Analysts say that a design or manufacturing issue is unlikely, but BA stock fell in mid-morning trading.
Flight Flight 5735, a China Eastern Airlines 737-800 jet with 132 people including 123 passengers and nine crew members, crashed over the mountain town of Wuzhou on its way to Guangzhou. Chinese state television said that the causality situation was "unclear." But reports from the ground said the crash caused a fire.
The jet was an earlier model Boeing 737 that was delivered to China in 2015. The plane is not a Boeing 737 Max, which was involved in two high-profile crashes in 2018 and 2019. The newer aircraft hasn't yet been recertified by Chinese officials.
Boeing shares fell 5.2% to 182.56 in mid-morning trading on the stock market today. Spirit AeroSystems fell 5.4% to 44.41. The supplier makes around 70% of each Boeing 737. Airbus' U.S. listed shares dipped 1.3%.
Boeing 737 Crash Unlikely To Lead To A Major Grounding
China Eastern said the cause of the crash was under investigation. Reuters reported that the Boeing 737 fell at 31,000 feet per minute during its final descent, according to flight-tracking data.
The U.S. Federal Aviation Administration tweeted that it was aware of the reports of the crash and was "ready to assist in investigation efforts if asked."
The Boeing 737 Max crashes led to a two-year worldwide grounding and multiple investigations into Boeing's business practices and increased scrunity on the design of the aircraft. But Monday's crash is unlikely to be design or manufacturing issue.
"The leading causes of commercial air transport crashes tend to be maintenance issues, pilot error, or sabotage, not a manufacturing or design issue," wrote Cai Von Rumohr, a Cowen analyst, in a note Monday. "And for a plane that is seven years old and has been in commercial service since 2015, it seems less likely, although not impossible, that the cause would be a design or manufacturing issue."
Boeing has delivered over 7,000 737-800 jets since the model debuted in 1994.
But Von Rumohr warned that some passengers might be uneasy flying on Boeing 737 jets until investigators uncover the root cause of the China Eastern crash.
He believes that the cockpit voice recorder, which can offer insight into the incident, will be more easily recovered as the plane crashed into a wooded area instead of the ocean.
Follow Gillian Rich on Twitter @GillianRich_ for aviation news and more.
