Boeing Co (NYSE:BA) shares took a nosedive in pre-market deals Wednesday as the storm clouds appear to continue to gather above the aerospace giant, as news emerged that another of its jets has crashed, killing everyone on board.
A Boeing 737-800 passenger plane operated by a Ukrainian airline crashed shortly after take-off from Iran early on Wednesday morning, killing 167 passengers and nine crew members.
The plane, an older version of the group's 737 MAX, which has been grounded for nearly a year after two fatal crashes, was bound for Kyiv from Tehran’s Imam Khomeini International airport.
"A 'technical failure' following a fire is believed to have caused the tragedy, which saw the plane crash around 6 minutes after take-off," noted David Cheetham, chief market analyst at XTB.com earlier today.
"The disaster involving a Boeing plane will once more draw unwanted attention to the firm, which was widely criticized for its response to earlier crashes in Indonesia and Ethiopia."
On Monday this week, it was reported the group was mulling plans to raise more debt amid the rising costs of grounding its 737 MAX jet. It is still working to ready the passenger planes for service after two horror crashes within five months, which left a total of 346 people dead.
Today, broker Cowen also cut its rating on the shares to 'market perform' from 'outperform', citing the 737 Max crisis for adding to the group's costs and delaying production.
Cheetham said that while the latest crash may well be 'totally unrelated' to the 737 MAX issues, it would "raise questions" as to the safety of Boeing's operational fleet.
During a press conference today, a spokesperson for Boeing said there had been nothing wrong with the plane, which was last serviced on Monday, January 6 and that the crew were very experienced.
Meanwhile, the Ukrainian embassy in Iran released a statement saying engine failure had caused the crash, citing preliminary information. But later the embassy removed the statement and said: "Any statements regarding the causes of the accident prior to the decision of the commission are not official."
In a fix
"Let’s face it, Boeing is in a fix. It’s terrible news on top of bad news," said Neil Wilson, chief market analyst for Markets.com on Wednesday.
"Whilst we await to see whether it really was a technical/engine problem that led to its plane crashing shortly after take-off in Tehran (I have my doubts – the timing is very, very suspect), there are few who think that the company is out of the woods."
Boeing shares in New York flew 1.27% lower at US$333.
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