Boeing stock dives after 737 Max 8 crash as several countries ground the plane

Boeing Co. stock dived more than 7% on Monday morning after one of the company’s workhorse 737s crashed in Ethiopia over the weekend, killing all 157 people aboard. China, Indonesia and Ethiopia and additional nations have grounded the Max 8, and airlines in other countries have signaled they may follow suit.

Boeing said Monday it had no reason to recommend that airlines ground the plane. “The investigation [of the crash] is in its early stages, but at this point, based on the information available, we do not have any basis to issue new guidance to operators,” Boeing said in a statement reported by CNN.

The fallout from Sunday’s accident comes as the Boeing faces intense scrutiny over another deadly plane crash involving the same new 737 Max 8 model.

Sunday’s 737 crash is the second crash shortly after takeoff in six months for one of Boeing’s most successful aircraft. In October, Lion Air Flight 610, in a new state-of-the-art Max 8, plunged into the Java Sea shortly after takeoff from Jakarta, killing all 189 passengers and crew members.

China’s Civil Aviation Administration announced early Monday that it had asked domestic airlines to temporarily ground all Boeing 737 Max 8 jets. It was the first time China had taken the lead in ordering a model grounded before other national aviation agencies.

Cayman Airways and Indonesia’s airlines also suspended the use of the 737 Max 8 plane. Indonesia’s director general of civil aviation, Polana Pramesti, said the move was to ensure flight safety and that the planes would be inspected. Indonesia has 11 Max 8 aircraft in service. Officials are “conducting an inspection by temporarily grounding the planes to make sure that they’re airworthy,” Pramesti said in a statement.

Ethiopian Airlines said its fleet of the planes would be grounded as an “extra safety precaution.”

India’s chief air regulator announced it would be reviewing the situation and planned to issue new safety instructions to operators by Tuesday.

In Vietnam, meanwhile, the Civil Aviation Authority said it would not license the use of the Max plane in the country pending the results of investigations and remedial measures. Although there are currently no Max 8 aircraft in use in Vietnam, budget airline VietJet Air ordered 100 Boeing 737 Max aircraft in February, including 20 of the Max 8 version, at the same time that President Trump was meeting with Vietnamese leaders in Hanoi.

In Morocco and Mongolia, authorities suspended operation of Boeing 737 Max 8 planes flying in each country, news agencies reported. Royal Air Maroc had two of the airlines in service and two others on order. Mongolia reportedly had one of the planes in service.

Sunday’s crash, along with October’s Lion Air accident, raises questions about the 737 Max 8, which has been an important profit driver for Boeing since it was introduced in 2017. The plane is key to Boeing’s broader international ambitions as the company competes with Airbus, its European rival in the commercial airline business.

Chicago-based Boeing has delivered 354 of the jets globally and has 2,912 on order, according to market estimates maintained by Boyd Group International. The jet that crashed Sunday was one of five 737 MAX 8 planes operated by Ethiopian Airlines, which has an additional 25 on order.

In the United States, Southwest Airlines and American Airlines have 59 of the planes between their two fleets, with 304 on order. Southwest said it has been in touch with Boeing and plans to follow the investigation. It had not made any changes to its operations or inspection protocol as of Sunday, the airline said. American Airlines said it was monitoring the investigation but remained confident in the safety of its aircraft.

Boeing shares were down 7.6% at $390.47 around 9:20 a.m. Pacific Time on Monday. The selloff hit the Dow Jones industrial average, which was up only 0.3% even as other major U.S. indexes climbed well over 1%. Boeing, with more than $100 billion in annual revenue and 153,000 employees, is one of the most heavily weighted of the Dow’s 30 components.

Boeing has been one of the Dow’s biggest success drivers of the 10-year-old bull market. Boeing shares were up more than 30% this year before Monday.

Before Sunday’s plane crash, the company was having a stellar year. Its commercial business has been surging, and three major military contracts totaled more than $18 billion combined to build training jets, replacement helicopters and drones that can refuel fighter jets in midair. Boeing is also building the next Air Force One, a spacecraft to ferry astronauts to the International Space Station and a monster rocket that NASA says will one day take them to the moon.

In 2016, Boeing celebrated its 100-year anniversary, a legacy that marches in lockstep with the history of American aviation, from dawn of commercial air travel in the years following the Wright Brothers to the bombers that helped to allies win World War II, to the F-18 Hornets and 747s in use today.

Now that investigators are probing two crashes that have killed a total of 346 people, the company is facing a crisis involving its core business and a threat to the reputation it has built up after decades.

One of Boeing Chief Executive Dennis Muilenburg’s goals for the company has been to better integrate its three major business units — commercial jets, defense and space — under a strategy he has called “One Boeing.”

Its commercial airliner business has long been the driver, and international orders for Boeing’s commercial jets continued to climb, even after the crash in October. With a backlog of 5,900 airplane orders, valued at $412 billion, it predicted steady growth in 2019.