Boeing stocks drop by 5% after Air India’s Dreamliner Jet crashes
Boeing’s shares fell 5% on June 12 after the Air India 787-8 Dreamliner Jet crashed a few minutes after taking off. The new CEO has thrown a big set-off for planmakers as it appears to rebuild trust in response to a series of safety and production challenges.
Boeing (NYSE: BA) 787 The Dreamliner carrying 242 people crashed in India, with reportedly few survivors remaining.
Human tragedy is a major focus, but the incident also raises new safety concerns. Boeing stocks fell 5% as of 10am, with engine maker GE Aerospace stocks (NYSE:GE) It fell by 2%.
Fresh uncertainty clouds the investment picture
According to reports, Air India Flight 171 took off from Ahmedabad on its way to London, but crashed shortly after takeoff. This was the first fatal incident involving Dreamliner, who has been in work since October 2011.
It takes months, if not years, to determine the cause of an incident. There are also a wide range of potential factors that are considered in addition to manufacturing issues, including weather, human error, and maintenance.
But for Boeing, who is in the process of rehabilitating its reputation after a pair of fatal accidents involving the 737’s biggest aircraft, the incident creates fresh investor uncertainty, so that the company appears to be regaining its footing.
There’s no simple answer from here
The best advice for investors is to do nothing. Expect there will be little definitive conclusion about what happened for a while. In many cases, such incidents are the result of a cascade of various factors.
Even before today’s incident, Boeing investors were on a long journey. Aerospace companies are still facing 737 largest government production limits that will increase their total debt by more than 400% during the pandemic and limit their cash flow and their ability to repay its balance.
Boeing is moving forward to refresh its management team and meet government requirements to expand production. There is no conclusion yet to be drawn on whether the Air India case will affect the company’s course.
Lou Whiteman has no position in any of the stocks mentioned. Motley Fool recommends GE Aerospace. Motley Fools have a disclosure policy.
The Motley Fool is a partner at USA Today, providing financial news, analysis and commentary designed to help people control their financial lives. The content is produced independently of USA Today.
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