Monday witnessed a decline in Boeing's share price.
Boeing (BA dropping by 1.46%) is having a rough time. Troubles with their 787 and 787 MAX aircraft have been a thorn in their side for years. As 2024 draws to a close and 2025 approaches, attention shifts to their workhorse 737-800.
Last Sunday, a Boeing 737-800, functioning as Jeju Air Flight 2216, had a rough landing at Muan International Airport in South Korea, unfortunately claiming the lives of most on board. This morning, a second Jeju Air 737-800, Flight 7C101, was forced to head back to Seoul due to a reported "landing gear issue."
With all 737-800s in South Korea now undergoing inspection, Boeing stock dipped 3.7% by 10 a.m. ET.
Is this a Boeing issue, an airline issue, or an airport problem?
The specifics of both events are still being sorted out. In the case of Flight 2216, it appears the plane aborted its initial landing attempt, then suffered a bird strike during the second attempt. The exact point when the wheels failed to deploy remains uncertain, and the pilots executed a textbook belly landing. However, disaster struck when the plane skidded into a concrete wall at the end of the runway and blew up.
For Flight 7C101, the "landing gear issue" seems to have resolved itself, prompting the plane's return to Seoul as a precautionary measure.
How bad is this for Boeing?
This is the real concern for Boeing, it seems. The problem with the 737-800 itself is relatively minor. South Korea only has 101 737-800s in operation, with Jeju Air operating 39 of them. Both incidents involving Jeju Air suggest that the issue might be more related to Jeju's maintenance practices than any defect in the Boeing product.
Even if this were a Boeing problem, Boeing isn't making a big push to sell more 737-800s right now. Out of the 6,268 planes on order in Boeing's current backlog, only a dozen are 737-800s.
The major concern is that, much like the pilots of Flight 7C101, Boeing's ongoing involvement in negative headlines may cause customers to reconsider purchasing from Boeing, regardless of the specific model.
Following the inspection of all 737-800s in South Korea due to the recent incidents, investors might be cautious when considering their finance options for investing in Boeing stock. The negative headlines surrounding these events could potentially impact Boeing's reputation and sales, affecting their financial performance in the near future.
Given this situation in the finance world, Boeing may need to focus on addressing public concerns and restoring confidence in their products, as any negative impact on sales could have significant consequences for their overall financial health.
