Boeing crash woes set to wipe $21 billion off market cap, dragging Dow lower, after China and Ethiopia to ground some 737s
- Boeing shares are set to drop at least 9% when markets open on Monday, wiping about $21.5 billion off the company's market capitalization.
- Questions are being asked about the manufacturer after its Boeing 737 MAX 8 aircraft crashed on an Ethiopian Airlines flight to Kenya Sunday morning, the second deadly crash in recent months.
- 157 people died in the latest crash. Chinese aviation authorities told airlines on Monday to ground all flights involving the model in question.
Boeing shares are set to take a $21.5 billion hit after the second crash in six months involving one of its aircraft.
An Ethiopian Airlines flight to Kenya crashed on Sunday morning, killing 157 people and mirroring a similar incident in Indonesia last October. The US aircraft manufacturer's safety record is now in question - Chinese aviation authorities told airlines to ground all flights involving Boeing's 737 MAX 8 model.
"This tragic incident will be a massive hurdle for Boeing to overcome," said Jasper Lawler, head of research at London Capital Group.
Boeing shares are down 9% in pre-market trading as of 9 a.m in London (5 a.m ET) and are set to drag down the Dow with futures down 0.8%.
The company has postponed the debut of a new plane, the 777X Jetliner, which was planned for this week in light of the fallout from the Ethiopia crash.
Both flights involved brand new planes which crashed just a few minutes into their respective flights and is Boeing's bestselling aircraft of its type. Boeing sold 580 737s last year, 72% of the company's total deliveries.
The cause of the crash is not yet known. However, flight tracking website Flightradar24 detected that the flight had shown "unstable vertical speed" before crashing.
In October, a Lion Air flight carrying 189 people went down in Indonesia.