Shares Of Boeing Respond To Probe Of Wing Crack Issue, Loss Of Contact With Malaysia 777-200
On Monday, shares of Boeing (NYSE: BA) have traded as low as $124.76, down 3.0298 percent amidst the 787 wing crack issue and lack of contact with Malaysia 777-200.
Boeing announced that 43 of its 787 Dreamliner aircrafts will be inspected for possible airline fractures in the wings on Friday. The company noted a manufacturing defect by Boeing's wing manufacturer Mitsubishi Heavy Industries. None of the 43 planes have been delivered to clients prior to the company's statement.
Deutsche Bank analyst Myles Walton noted that the remedy for the wing crack issue seems relatively straight forward.
Walton commented, “There will clearly be a cost burden to inspect/fix some 43 787s (none of those in service), but we'd guess Boeing will have contractual protection to revert costs to MHI. That being said, near-term deliveries are likely to be slower than desired and this rework puts additional pressure on the production system that was having some cost challenges with travelled work out of the Charleston, S.C. facility.”
Last Friday night, contact was lost with the commercial jetliner from Kuala Lumpur to Beijing with 227 passengers and 12 crew members. On March 8, an U.S. intelligence officer noted, “No nexus to terrorism yet, although that's by no means definitive. We're still tracking.” CNN writers Chelsea Carter and Jim Clancy reported on the grief of the missing aircraft in China with 154 of the passengers from China and 38 Malaysians on board.
Amidst these headlines and the unplanned landing of a JAL 787 due to engine hydraulic pressure issues in January, shares of Boeing continue to take a hit. Monday, Boeing experienced its biggest intraday decline since January 31.
Shares of Boeing closed at $128.54 on Friday.
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