Taking Down American Industry
Source: RT News
Boeing shares plunge over downgrade due to 737 Max production delays
April 8, 2019
US aircraft manufacturer Boeing’s shares tumbled more than four percent on Monday after Bank of America Merrill Lynch (BofA) downgraded the stock. The bank said that troubles with Boeing’s 737 MAX 8 jets are worse than expected.
BofA cut its rating on the Dow component from buy to neutral and lowered its price objective to $420 from $480. It said that now the bank estimates delays with the plane will last six to nine months, longer than the three- to six-month delay originally forecast.
The two recent crashes of the 737 Max forced Boeing to cut production of its most popular passenger jet. The company’s shares have fallen nearly nine percent in the past month but were still up 21.5 percent year to date.
In March, Ethiopian Airlines Flight 302 plunged shortly after takeoff, killing all 157 people on board. Indonesian Lion Air Flight 610 nosedived into the sea last October, killing all 189 passengers and crew. Investigators noted “clear similarities” between the two accidents.
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Source: Zero Hedge
More Boeing Backlash: China Suspends $6 Billion Order For 100 737s
by Tyler Durden • Mon, 04/08/2019
Dealing another blow to public confidence in Boeing’s ability to swiftly reassure regulators that its 737 MAX 8 can be made safe for passenger travel, the South China Morning Post on Monday reported that China Aircraft Leasing Group Holdings has put an order for 100 new 737s on hold, until it can be assured of the aircraft’s safety.
This follows a decision by Indonesia’s national carrier to cancel a $6 billion 737 MAX order. The airline had been planning to order 49 planes. Boeing last week said it would cut its pace of production by 20% to just 42 a month.
China was the first country to ground the 737s after Ethiopian Airlines flight ET302 crashed just minutes after takeoff – the second deadly incident involving the planes in just 5 months. A preliminary report from investigators found that the pilots followed Boeing’s safety procedures, but were still unable to right the plane.
Boeing is working on an update of its MCAS anti-stall software, which is believed to have contributed to both the crash of ET302 and a deadly Lion Air crash that occurred just five months earlier, but the fix is taking longer than anticipated.
Per its original delivery schedule, the first 737 was supposed to be delivered to the aircraft lessor in Q3 of this year. Originally, the lessor signed its contract with Boeing in June 2017, ordering 50 aircraft, then increasing it by 25 with an option for another 25. The order for the initial 50 aircraft was valued at $5.8 billion.
The company said it has stopped paying installments on the planes it has ordered.
The Hong Kong-listed lessor, controlled by the state-owned conglomerate China Everbright Group, placed an order for 50 aircraft in June 2017. CALC then increased it by another 25 in December with an option for 25 more as part of its plan to grow its overall fleet from 133 in 2018 to 232 by 2023. According to the original schedule, the first MAX jet was expected to be delivered to CALC in the third quarter of this year and continue up to 2023.
“The purchase has been suspended and we have stopped paying the installments,” said Chen Shuang, chairman of CALC and chief executive of China Everbright, the financial arm of China Everbright Group.
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