Following the weekend tragedy of Ethiopian Airlines Flight 302, and its similarities to the crash of Indonesia’s Lion Air Flight JT610 in October 2018, Boeing stock is tumbling ahead of Monday’s opening bell.
There is no official link at the moment between the two crashes, but the similar circumstances have caused concern. Both flights involved a new Boeing 737 Max 8 aircraft, and the accidents took place shortly after takeoff. Mary Schiavo, a former Inspector General of the U.S. Transportation Department, told CNN that the events were “highly suspicious.”
Ethiopia and China have both grounded the model of aircraft. So have Cayman Airways, Indonesia, and Royal Air Maroc, according to the Flight Safety Foundation, for a a total of more than 100 planes grounded following the incident.
Because the 737 Max is Boeing’s best-selling narrow-body plane, the markets are reacting quickly and hard. At 7:45 a.m. on Monday, shares were down 9.7% in pre-market trading (ba). The number has been shifting between 8% and 10% during the morning. A fundamental problem with the plane’s design could cause an even bigger reaction.
And then there’s the Dow Industrials, which is likely to see at least a 200-point drop on Monday according to CNBC, and possibly as much as 250 points, because the index is price-weighted, giving Boeing an outsize impact.