Shares of Boeing suppliers fall after 737 plane crashes in southern China

A woman walks past a Boeing logo at the China International Aerospace Exhibition, or Airshow China, in Zhuhai, Guangdong Province, China, September 28, 2021. REUTERS / Aly Song

March 21, 2022

(Reuters) – Shares of US airline Boeing Co and its suppliers fell on Monday as a 737-800 China Eastern Airlines plane with 132 people on board crashed in the mountains of southern China.

The plane crashed after a sudden descent from the height of the cruise. The media reported that rescuers found no signs of survivors. The cause of the crash was not yet known. Boeing said it was working to gather more information.

FlightRadar 24 said the jet involved in the crash was six years old. Following the crash, Chinese state media reported that the airline had pinned down its 737-800 fleet, which according to the flight tracking website had 109 such aircraft.

The popular variant is the predecessor of the Boeing 737 MAX, which is awaiting approval from regulators in China, the world’s largest domestic aviation market.

The 737-800 has a maximum capacity of 189 seats and is equipped with a CFM-56 engine, according to the Boeing website.

It was not immediately clear whether the aircraft involved in the accident had the same engine as the airlines are free to choose engines from other suppliers.

The CFM engines are manufactured by a joint venture between General Electric Co and the French Safran SA. Shares of GE fell about 1%, while Safran, listed on France, fell 3%.

Shares of the airline fell 4.5% at the beginning of trading, while the US-listed ADR of the Chinese airline fell about 9%.

Spare parts suppliers Spirit AeroSystems Holdings Inc, Hexcel Corp and Triumph Group Inc fell between 1% and 4%.

CFRA Research analyst Colin Scarola said the crash should not technically affect MAX re-certification in China, where it was immobilized three years after two deadly crashes in Indonesia and Ethiopia.

But he did not rule out the possibility that the country could use the accident as an excuse to delay approval. “China probably would not admit that this is what they are doing. “But we certainly believe it could happen,” Scarola said.

(Report by Abhijith Ganapavaram in Bengaluru · Edited by Arun Koyyur)

Shares of Boeing suppliers fall after 737 plane crashes in southern China

Source link Shares of Boeing suppliers fall after 737 plane crashes in southern China

Back to top button