China Eastern Airlines has grounded all of its Boeing 737-800 planes after a flight carrying 132 people crashed in the city of Wuzhou en route from Kunming to Guangzhou today (March 21).
Boeing’s stock dropped by more than 4% on the news. Today’s crash comes three years after another Boeing model, the 737 Max, was grounded worldwide following two fatal crashes within five months of each other. The aircraft manufacturer had been working on mending its reputation with China, which has been holding out on letting the 737 Max resume service in the country.
Shares of General Electric and France’s Safran, which manufacture the engine used for the 737-800, also fell on news of the crash.
Boeing expresses concern for China Eastern passengers and crew
“Our thoughts are with the passengers and crew of China Eastern Airlines Flight MU 5735,” a Boeing spokesperson said in a statement to Quartz. “We are working with our airline customer and are ready to support them.” The company said it’s in contact with the US National Transportation Safety Board, and is prepared to assist in the investigation being lead by China’s Civil Aviation Administration.
The Federal Aviation Administration (FAA) also said it will aid investigation efforts if asked.
China Eastern Airlines said in a statement it has dispatched work teams to the accident site and opened a hotline for family members, but did not say how many people were killed in the crash. Neither China Eastern nor Boeing has identified the cause of the crash, and rescue efforts could be prolonged by inclement weather.
Crash could hamper efforts to re-certify 737 Max
China was the first country to ground the Boeing 737 Max in 2019 following crashes in Indonesia and Ethiopia, and while the country’s air regulators issued a safety approval in December for the plane to resume operations the government still hasn’t given a final sign-off for Chinese airlines to start flying the model again. The manufacturer appeared to be inching closer to restarting 737 Max passenger service in the country last week, as one of the jets took off from Seattle for a Boeing completion plant in China, and Boeing has said it hopes to resume 737 Max sales in China this quarter. The FAA cleared the 737 Max to fly again in the US in November 2020, and regulators in Brazil, Europe, Canada, and the UK have approved the plane as well.
While the China Eastern crash involves a different aircraft, analysts told the New York Times Chinese government officials may hesitate to approve the 737 Max while investigating an incident that occurred on another Boeing plane. A significant delay of 737 Max deliveries to China would likely affect Boeing’s cash flow and production plans, JPMorgan analyst Seth Seifman wrote in a note.
Quartz
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