Breaking: Boeing Stock Plummets after President Trump Halts 737 MAX 8 Flights

Journalist:
Josiah Wilmoth @Y3llowb1ackbird
March 13, 2019

Boeing stock is in free-fall on Wednesday afternoon after US President Donald Trump announced that he had instructed the Federal Aviation Administration to halt all Boeing 737 MAX 8 and 9 flights following the Sunday crash of Ethiopian Airlines flight 302.

Trump Halts Boeing MAX 737 8 Flights

“All of those planes are grounded, effective immediately,” Trump said at the White House, adding that the FAA would provide more details in the coming hours.

According to Trump, the FAA became aware of “new information” that led the agency to reverse course on its 737 MAX 8 stance.

“We’re going to be issuing an emergency order of prohibition to ground all flights of the 737 MAX 8 and the 737 MAX 9 and the planes associated with that line.”

“Any plane currently in the air will go to its destination and thereafter be grounded until further notice,” Trump said, continued that he had spoken to Boeing and US airlines before halting the flights.

He concluded:

“Boeing is an incredible company. They are working very, very hard right now, and hopefully they’ll very quickly come up with the answer, but until they do the planes are grounded.”

Boeing Shares Tumble

Boeing shares had already been rocked during the week’s first two trading sessions as a succession of airlines and governments suspended flights involving 737 MAX 8 planes, one of which was also involved in the October 2018 Lion Air flight 610 crash that killed 189 people.

Boeing shares continued to fall after President Trump halted 737 MAX 8 and 9 flights. | Source: Yahoo Finance

On Tuesday, Trump had seemed to attribute the crashes to the rising complexity of aircraft automation software, while the FAA said that the 737 MAX 8 remained airworthy pending a future mandatory software upgrade.

Earlier today, Canadian Transport Minister Marc Garneau said that the Canadian government had identified “a possible, although unproven, similarity” between the Ethiopian Airlines and Lion Air crashes.

Former NASA Engineer: Boeing 737 MAX 8 Crashes are a ‘Serious Safety Issue’

Airlines may no longer fly 737 MAX 8 or 737 MAX 9 flights within the US until further notice. | Source: Shutterstock

In an exclusive interview with CCN, former NASA engineer Mike Slack said that regardless of what the investigation ultimately turned up, there was enough information from the two recent crashes to conclude that the Boeing 737 MAX 8 has a “serious safety issue.”

Slack said:

“We don’t have to know what caused the crash to know that we have a serious safety issue on our hands. Safety for aircraft is measured in crashes and deaths per 100,000 flight hours—These two crashes in five months represent a massive spike in accident rate. Both [planes] were newly delivered in 2017 and both [planes] were newly certified with very limited operation hours. It sends a signal in flashing red letters: ‘This is a safety problem!’”

He further raised questions about the FAA certification process that gave aircraft the all clear to fly the friendly skies, speculating:

“In aircraft certification, much of the process by manufacturers is done by employees with delegated authority from the FAA.”

“While this is not widely known, it creates a conflict, but only in rare circumstances where it has been arguably abused. It isn’t always the FAA directly certifying the parts and machines. It can create an ethical conundrum for employees, but has done so only very rarely.”

“Until the problem is located, we will not know if this was the case—maybe an employee signed off and shouldn’t have—maybe there is no connection there. Manufacturers SHARE responsibility with the FAA.”

Developing…Please Check back for updates.

Last modified (UTC): March 13, 2019 15:12

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.