Boeing (NYSE:BA) might encounter yet another problem—this time with its 737–800 planes. A Ukrainian Boeing 737–800 aircraft crashed today within minutes after takeoff from Iran’s Imam Khomeini International Airport. The flight, carrying 167 passengers and nine crew members, was heading to Kyiv—Ukraine’s capital. According to a CNBC report, Ukraine’s President Volodymyr Zelensky said that all of the 176 people on board lost their lives.
Boeing stock was trading 2.5% lower in the pre-market trading session today.
Boeing 737 crashed in Iran
According to the CNBC report, Ukraine Airlines’ Boeing 737–800 lost contact shortly after it took off at nearly 2:40 AM GMT (9:40 PM ET on Tuesday in the US). The state-run media reported that the accident happened due to technical problems.
The Boeing 737 crash happened hours after Iran’s missile attack on two US military bases in Iraq. However, the Ukrainian embassy ruled out any missile or terrorist attack, according to the CNBC report. The embassy hinted at a possible technical glitch with the aircraft. Later, the embassy said, “any statements regarding the causes of the accident prior to the decision of the commission are not official,” as reported by CNBC.
In response to the latest accident, Boeing released a statement. The company said, “We are aware of the media reports out of Iran and we are gathering more information.” Usually, Boeing gathers information to access the actual cause of the crash. However, the scrutiny would be impacted by the ongoing conflict between the US and Iran.
Boeing’s troubles rise amid MAX crisis
The latest mishap could enhance Boeing’s problems. The company is already encountering difficulties with another model of its 737 series planes. The company has been in troubled waters for the last ten months. Regulators grounded the company’s best-selling 737 MAX jets in mid-March. Notably, regulators imposed a global flying ban on 737 MAX aircraft following two deadly accidents within five months.
Boeing is still struggling to fix the issue with the aircraft’s MCAS (Maneuvering Characteristics Augmentation System) or flight-control system. Meanwhile, the FAA has found another problem with 737 MAX aircraft. Recently, Boeing and the FAA found some wiring issues in MAX aircraft, which could cause a short circuit.
The new problem could delay the much-awaited return of the Boeing 737 MAX plane. A delay in gaining regulatory approval is impacting Boeing’s financials. According to the company’s last quarterly results, the total MAX grounding cost reached $9.2 billion as of the third quarter. Due to uncertainty about regulatory approval, Boeing shut down MAX production from January 1.
We think that the Ukraine Airlines crash might make regulators extend their scrutiny to the Boeing 737–800 model. Launched in 1993, the Boeing 737–800 is a single-aisle, twin-engine aircraft that covers short to medium distance. The 737–800 has encountered several other deadly accidents in the past. The Air India crash in 2010 and the flydubai accident in 2016 were the deadliest. Over 200 people lost their lives in both of the crashes.
The top four US air carriers own hundreds of Boeing 737–800 planes. Currently, Delta Air Lines (NYSE:DAL), United Airlines (NYSE:UAL), Southwest Airlines (NYSE:LUV), and American Airlines (NASDAQ:AAL) have 77, 141, 207, and 304, respectively, 737–800 aircraft in service.