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The model that crashed twice in half a year was allowed to go around! The stock price did not “fly”

The model that crashed twice in half a year was allowed to go around! The stock price did not "fly"

Following two air crashes in October 2018 and March 2019, the Boeing 737 MAX passenger plane was “grounded globally.” On the 18th local time, the FAA stated that it had officially approved the Boeing 737 MAX passenger plane to go back and forth after going through a go-around assessment and safety review.

The FAA approves the Boeing 737 MAX to fly

In an interview with the US financial media, FAA Director Steve Dixon stated that the process of approving the 737 MAX’s return to flight is not based on the timeline, but based on the actual steps required, after 20 months of “comprehensive and systematic” Land” after careful verification. The FAA will continue to cooperate with relevant parties around the world for some time to come to ensure that all relevant personnel have implemented the necessary measures to ensure the safe return of the Boeing 737 MAX.

FAA Director Steve Dixon : I can tell you that I am 100% confident in our decision . The design of the 737 MAX has been adjusted. I will rest assured that my family will fly on the 737 MAX .

The FAA also pointed out that despite the approval of the 737 MAX to fly again, Boeing still has a lot of work to do in its efforts to improve its safety culture, and subsequent airlines also need to improve pilot, pilot training and software updates. Cooperate with action. Currently, American Airlines is the only airline that plans to restart Boeing 737MAX. The company stated that a Boeing 737 MAX will be used on a flight between New York and Miami starting December 29.

However, whether the Boeing 737 MAX can resume flights around the world still needs the approval of regulatory agencies in other countries and regions. Recently, European aviation regulators hinted that they may approve Boeing’s application. Regulators in other parts of the world are still conducting their own assessments and have not disclosed their intentions.

The Boeing 737 MAX passenger plane suffered two major air crashes in October 2018 and March 2019, which killed 346 people and was subsequently grounded globally. The investigation revealed that the cause of the crash was related to the design defect of the anti-stall automatic control system of this model.

The market still has doubts about Boeing stock price falling

Although approved for the go-around, Boeing’s stock price closed down more than 3% on the 18th. The capital market still has certain doubts about the development of Boeing in the short to medium term. In order to restore public confidence, Boeing and U.S. aviation regulators still have a lot of work to do.

A CNBC reporter said that although the Federal Aviation Administration (FAA) release is a significant benefit for Boeing itself, Boeing’s stock price did indeed rise by nearly 7% during the pre-market trading stage on Wednesday , local time, but it was soon after the market opened. Following the market’s reversal and finally closing down by about 3.2% , Boeing’s share price performance very intuitively reflects the current doubts in the capital market.

Fernandez , chief market strategist at Crossmark Global Investments  : We will not re-buy Boeing stocks yet . We previously held Boeing stock as part of our global equity revenue strategy. But there are still many questions that need to be clarified. They are basically about the 737 MAX. For example, will people want to take the 737 MAX again? 

Will they change to other flights? Are there any other questions? Therefore, we do not want to buy hastily, and we need to wait and see a little longer. This doubt is also very real. Affected by the grounding and the epidemic, Boeing’s performance this year can be said to be very bleak, with only 98 commercial aircraft delivered in the first three quarters. Due to a large number of orders being cancelled or postponed, Boeing has a backlog of thousands of aircraft, including 3,300 737 series passenger aircraft.

Boeing estimates that the crash and its subsequent effects, including the suspension of production earlier this year, cost the company US$20 billion. Under the epidemic situation, it is difficult to directly boost Boeing’s financial performance in a short period of time after the 737 MAX is allowed to go back. Previously, a survey conducted by Atmosphere Research showed that only 14% of consumers indicated that they would be willing to take the Boeing 737 MAX within six months of the return of the Boeing 737 MAX; more than two-fifths, or more than 40% Of passengers said that in order to avoid taking the Boeing 737 MAX, they would choose some relatively inconvenient flights, or more expensive flights.

In addition, CNBC reporters found that many 737 MAX pilots also have some doubts. In fact, just earlier this month, the American Pilots’ Union was still publicly warning that the FAA should improve the Boeing 737 MAX pilot training procedures to reduce the steps that pilots need to memorize and take in emergency situations.

Indeed, after two consecutive crashes, the leadership of Boeing and the FAA has changed, and the US Congress is also pushing for reforms in aviation regulation. According to Reuters, a reform bill requiring enhanced safety supervision has just been approved by the US Senate Commerce Committee.

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