China Eastern crash: Boeing, supplier stocks fall
Shares of US aircraft maker Boeing and its suppliers fell on Monday when a China Eastern Airlines 737-800 plane, with 132 people on board, crashed in the mountains of southern China.
The plane crashed after a sudden descent from cruising altitude. Media reported that rescuers found no signs of survivors. The cause of the accident was not yet known. Boeing said it is working to gather more information.
FlightRadar 24 said the plane involved in the crash was six years old. Following the crash, Chinese state media said the airline had grounded its fleet of 737-800s, which the flight tracking website said numbered 109 such planes.
The popular variant is a predecessor to Boeing’s 737 MAX, which is awaiting regulatory approval in China, the world’s largest domestic aviation market.
The 737-800 has a maximum capacity of 189 seats and is powered by a CFM-56 engine, according to Boeing’s website.
It was not immediately clear whether the plane involved in the crash had the same engine as airlines are free to choose engines from other suppliers.
CFM engines are manufactured by a joint venture between General Electric Co and France’s Safran SA. Shares of GE were down about 1%, while France-listed Safran fell 3%.
Shares of the aircraft maker fell 4.5% in early trading, while the Chinese airline’s US-listed ADRs fell around 9%.
Parts suppliers Spirit AeroSystems Holdings Inc, Hexcel Corp and Triumph Group Inc fell between 1% and 4%.
CFRA Research analyst Colin Scarola said the accident should not technically impact the recertification of the MAX in China, where it has been grounded for three years following the two fatal crashes in Indonesia and Ethiopia.
But he did not rule out the country using the accident as an excuse to delay an approval. “China probably wouldn’t admit that’s what they’re doing. But we certainly think it could happen,” Scarola said.