Boeing shares down after Federal Aviation Administration’s decision

Shares of Boeing tumbled roughly nine per cent on January 8.

Investors digested the news that the Federal Aviation Administration (FAA) had ordered airlines to ground dozens of Boeing 737 Max 9 aircraft for urgent inspections, according to CNBC.

The FAA issued the order on January 6 after a door plug blew out in the middle of an Alaska Airlines flight on January 5 when the nearly brand-new aircraft was flying at around 16,000 feet.

Shares of Alaska Air were down about four per cent. Spirit AeroSystems, which makes fuselages for the 737 Max, were down 15 per cent.

Large-scale groundings by aviation authorities are rare, but the FAA has been scrutinising Boeing and its bestselling 737 Max since the fatal crashes in 2018 and 2019. Boeing said it agrees with the FAA’s decision to ground the Max 9 planes for inspections. It was working on drafting instructions with federal regulators for airlines to begin inspections.

The FAA on January 6 said around 171 planes would be affected by its emergency airworthiness directive, which applies to US airlines and carriers operating in US territory. Alaska Airlines and United Airlines are the largest operators of the 737 Max 9 model, of which more than 200 are flying worldwide, according to Cirium.