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Boeing shares fall sharply after second deadly 737 MAX 8 crash

Key Points
  • Shares of Boeing sank as some airlines grounded the planemaker's best selling 737 MAX 8 passenger jet following the second deadly crash involving the plane.
  • Boeing said the investigation into the Ethiopian Airlines crash is in its early stages and there is no need to issue new guidance to operators of its 737 MAX 8 aircraft based on the information it has so far.

Shares of Boeing sank 9 percent in premarket trading on Monday as some airlines grounded the planemaker's best selling 737 MAX 8 passenger jet following the second deadly crash involving the plane.

A Nairobi-bound Boeing 737 MAX 8 operated by Ethiopian Airlines crashed minutes after takeoff from Addis Ababa on Sunday, killing all 157 on board. The same model flown by Lion Air crashed off the coast of Indonesia in October, killing all 189 on board.

The Boeing logo and name are seen on a building at Boeing's new facilities April 27, 2012, in North Charlston, South Carolina.
PAUL J. RICHARDS | AFP | Getty Images

The Civil Aviation Administration of China ordered Chinese airlines to ground all Boeing 737 MAX 8 planes after the crash. The CAA said it would contact the U.S. Federal Aviation Administration and Boeing regarding the resumption of operations once they are assured that measures have been taken to ensure safety.

Ethiopian Airlines said it had grounded its 737 MAX 8 fleet until further notice as an "extra safety precaution" even though it did not know the cause of Sunday's crash.

The 737 MAX 8 uses LEAP-1B engines made by CFM International, a joint venture of General Electric and Safran. Shares in Safran also fell 1.6 percent on Monday.

Boeing said on Monday the investigation into the Ethiopian Airlines crash is in its early stages and there is no need to issue new guidance to operators of its 737 MAX 8 aircraft based on the information it has so far.

Shares of rival Airbus were up 0.5 percent.

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Key Points
  • Ethiopian Airlines Flight 302 crashed in a rural area outside of Addis Ababa, killing all 157 people on board.
  • The crash comes less than five months after the crash of a Lion Air Boeing 737 MAX 8 in Indonesia, killing 189 people.
  • The recent incident raises questions for the top-selling plane made by Boeing, whose commercial airplane business generated nearly 60 percent of the company's record $101.1 billion in revenue last year.
  • Even with Monday's losses, Boeing's stock is up 23 percent this year, making it the top gainer in the Dow Jones Industrial Average.