Europe Preparing to Ground Boeing 737 Max After U.K. Halts Flights

Europe is preparing a ban on flights with Boeing Co.’s 737 Max aircraft, according to a person familiar with the matter, in a move that could trigger a global grounding of the model after a crash in Africa on Sunday raised questions about its safety.

Britain’s Civil Aviation Authority has already joined countries banning the plane from its airspace, saying Tuesday that the measure was “precautionary” in the absence of information from the Ethiopian Airlines jet’s flight recorders.

The European Aviation Safety Agency plans to take a similar step shortly, according to the person, who asked not to be named before an announcement.

While China, Australia and Singapore had already grounded the Max, the spread of the ban to Europe represents a major blow to Boeing as it grapples with the aftermath of the African tragedy. Britain is the world’s third-biggest aviation market, while EASA is one of the industry’s two biggest regulators along with the U.S. Federal Aviation Administration, which says the plane is safe to fly.

“I’m watching this unfold with an element of astonishment and bemusement,” said Sandy Morris, an analyst at Jefferies International in London. “What we’re looking at here is almost a rebellion against the FAA. You’re now looking at American and Southwest and asking, can you really still operate this aircraft?”

Boeing said following the British declaration that the FAA is not mandating any further action at this time, with the U.S. planemaker adding that other agencies and customers have made decisions that they believe are “most appropriate for their home markets.”

Shares of the Chicago-based company were trading 5.3 percent lower as of 10:22 a.m. in New York, extending losses from Monday when the stock had its biggest intra-day drop since the 9/11 terrorist attacks.

The U.K. ban directly affects five planes at the British arm of TUI AG, the world’s biggest tour operator, plus a sixth that was schedule to start flights this week, according to the CAA.

Norwegian Air Shuttle ASA said it won’t operate further services with its fleet of about 20 Max jets until further notice and that the moratorium will apply across its network, not just in Britain. Shares of the company, which is grappling with a cash squeeze after British Airways owner IAG SA dropped a takeover bid, tumbled 9.2 percent in Oslo before trading 4 percent lower.

The British Airline Pilots’ Association said in an email that it welcomed the CAA action and that while its too early to know the cause of the Ethiopian crash, “safety must come first.”

Airlines and regulators have halted flights by at least 150 Max aircraft in the wake of the tragedy. While investigators are working to retrieve information from the jet’s black-box flight recorders, concerns have been raised about similarities to a crash involving a Lion Air 737 in October, which a preliminary probe suggested was caused by an automated safety system taking control of the plane in response to erroneous readings from a faulty sensor.

Boeing issued further guidance to pilots on how to cope with such a situation, and said again after the Ethiopian disaster, which killed 157 people, that the Max is an intrinsically safe aircraft.

With numerous operators in Asia, Africa, Latin America and now Europe grounding the plane in the absence of conclusive evidence, the U.S. is looking isolated in continuing to permit flights.

President Donald Trump weighed into the controversy Tuesday, saying just minutes after the U.K. restrictions that aircraft “are becoming far too complex to fly.”

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