Alaska Airlines Causes Boeing Stock Plunge

Boeing Company is one of the largest aviation companies in the world, but shares of the publicly traded company plunged as investors grew concerned about damage to the business after a piece of the plane's bodywork on a Boeing 737 Max 9 blew out mid-flight. The Alaska Airlines flight had been traveling from Portland, Oregon to Ontario, California, and was forced to make an emergency landing due to one of the doors detaching from the plane. Investigators from the National Transportation Safety Board have recovered the door plug that fell off in a backyard near Portland. The specific cause behind the incident was due to doors and various panels not being attached properly, which has been identified as a colossal issue. Luckily, nobody was injured, but there have been measures taken to ensure the safety of the passengers that do fly on these planes.

The Federal Aviation Administration ordered all Boeing 737 Max 9 planes to be grounded until the problem can be determined and carefully examined. The grounding order applied to approximately 171 planes worldwide. To ensure the maximum amount of safety for people who fly, the FAA has grounded plane models close to the Boeing 737 Max 9. Due to this incident, Boeing has suffered severe repercussions to their reputation, and will most likely have to compensate airlines for any lost revenue that occurred. Shares of Boeing ( BA ) fell nearly 9%, and aerospace supplier Spirit AeroSystems ( SPR ) fell 11% in the days following the incident. The company played a crucial role in installing parts of the planes. Shares of Alaska Airlines dropped 0.2% as well. United Airlines found a loose bolt on the same compartment of the plane that flew away mid-flight for Alaska Airlines, during the FAA-required inspection. This catastrophe had all parties feeling the entire weight of Wall Street on their backs. 

This accident is the most recent in a very rich history of problems for Boeing. In 2019, Boeing had their 737 Max planes grounded, following two crashes that killed 346 people. The company has recorded an annual loss in revenue for the fourth year in a row, and the financial loss has totaled up to nearly $2.2 billion for the first 9 months of last year. Boeing CEO, Dave Calhoun had this to say about the incident: “We're going to approach this, number one, acknowledging our mistake," and "We're going to approach it with 100% and complete transparency every step of the way."This pattern has shaken up Wall Street and the average citizens' trust in the aviation industry as a whole, so this will have detrimental effects on Boeing and all the smaller companies involved.

By Avner Belsky