Boeing
stock continued to stabilize following the emergency door plug blow out on Alaska Air Flight 1282.
Boeing,
and airlines, are working quickly to inspect planes with a similar configuration as the affected flight. Still, there are signs the grounding of 737 MAX 9 planes may not end anytime soon.
Shares were up 0.4% to $228.75 in premarket trading Thursday, after rising 0.9% Wednesday to snap a two-day losing streak.
S&P 500
futures were up 0.2% and
Dow Jones Industrial Average
futures were flat. Coming into Thursday trading, Boeing stock was down 13% since the start of the year.
Alaska Air
shares were up 0.8% in premarket trading.
Spirit AeroSystems,
which makes the MAX 9 fuselage for Boeing, was off 0.9%.
Alaska said Wednesday it will keep Boeing 737 MAX 9 planes grounded through Saturday, which affects 110 to 150 flights a day. The Federal Aviation Administration suspended all flights with that model of aircraft last Saturday and is still inspecting planes for loose bolts.
Boeing has been working with regulators on instructions for operating the MAX 9 jets with emergency door plugs safely. The plugs are used for certain seating configurations that don’t require all available emergency exits. Plugs aren’t new and have been used for decades.
Jefferies analyst Sheila Kahyaoglu pointed out Wednesday that Boeing has revised its initial instructions after receiving feedback from the Federal Aviation Administration. The FAA grounded 171 MAX 9 jets after the Alaska Air accident and said Tuesday “the safety of the flying public, not speed, will determine the timeline for returning the Boeing 737 9 Max to service.”
“Safety over speed likely extends [the] grounding,” wrote Kahyaoglu. Still, she assumes a two-week pause in flights as her base case.
U.S. Transportation Secretary Pete Buttigieg said Wednesday that no grounded aircraft will go back into service until they are safe and that there’s no timeline for getting them back in the air.
His comments underscore that investors shouldn’t expect the MAX 9 issue to be resolved quickly for Boeing.
One bit of good news for investors amid the turmoil is that the MAX is a relatively low-volume plane. The two-week grounding would cost Boeing roughly $36 million, according to Kahyaoglu. Wall Street sees the MAX 9 grounding costing Boeing between $1 million and $2 million a day in customer compensation.
Boeing is expected to generate some $6 billion in free cash flow in 2024.
Write to Brian Swint at [email protected] and Al Root at [email protected]
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