Boeing's top-selling plane raises safety concerns after second deadly crash in 5 months
- 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.
Boeing's fastest-ever selling aircraft is sparking safety concerns after an Ethiopian Airlines 737 MAX jet crashed shortly after takeoff on Sunday, killing everyone on board. It is the second deadly crash for the plane in less than five months.
Ethiopian Airlines Flight 302 crashed in a rural area southeast of Addis Ababa, killing all 149 passengers and eight crew members on board. The aircraft left the Ethiopian capital at 8:38 a.m. local time in clear weather and lost contact six minutes later, the airline said. Victims included citizens of over a dozen countries, including Kenya, Canada, the United States, Great Britain, China and Italy.
The flight was operated on a new Boeing 737 MAX 8, the same type that went down in the Java Sea, just after takeoff from Jakarta, Indonesia, in October, killing all 189 aboard.
Boeing shares lost 5.3 percent Monday to close at $400.01, after tumbling as much as 13.5 percent earlier in the day.
What brought down the four-month-old Ethiopian Airlines plane is not clear, but it is uncommon to have two fatal crashes of new planes so close together, industry experts said.
"It's almost unheard of," said John Cox, a senior crash investigator and former airline pilot. Cox and others warned that it is early in the crash investigation and there is no indication yet whether the two crashes were caused by the same factors.
Chinese aviation officials told domestic airlines Monday to temporarily ground their Boeing 737 MAX 8 jets and many had complied, according to flight trackers. China's Civil Aviation Authority said in a statement that it will contact Boeing and the Federal Aviation Administration and let airlines know when to resume flights after it makes sure the planes can fly safely.
Cayman Airways grounded its two Boeing 737 MAX planes until more information about the crash emerges. Its CEO Fabian Whorms said that the airline stands by "our commitment to putting the safety of our passengers and crew first by maintaining complete and undoubtable safe operations."
While both the Ethiopian and Lion Air planes had crashed minutes after takeoff, Lion Air had reported problems aboard its plane leading up to the crash, which did not appear to be the case in the Ethiopian crash, Cox noted. Flight-tracking site Flightradar24, said that data "show that vertical speed was unstable after take off" on the Ethiopian Airlines plane, a sign it struggled to gain altitude.
The Boeing 737 MAX has been flying for less than two years and is a best-seller for the Chicago-based aircraft manufacturer. Boeing has delivered 350 MAX jets to airlines around the world since May 2017 and had more than 4,660 in its order book as of January, according to the company.
The Ethiopian crash raises questions about 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, as airlines around the world race to bolster their fleets to cater to growing demand. Including Monday's stock-price retreat, Boeing's stock is up 23 percent this year, making it the top gainer in the Dow Jones Industrial Average.
An interim report from Indonesian investigators in November found that Lion Air's jet had several days of maintenance problems and that the pilots had battled an anti-stall system on the plane, which may have been receiving erroneous readings. The cause of the crash is still unknown.
The Boeing 737 MAX is flown by Southwest Airlines, American Airlines and United Airlines and is also in the fleets of Icelandair, Xiamen Airlines and Fiji Airways. The new planes are more fuel-efficient models of the workhorse Boeing 737 jets and has a range of 3,850 nautical miles.
"Our heart goes out to the families and loved ones of the passengers and employees on Ethiopian Airlines Flight 302," Southwest said in a statement. The Dallas-based airline operates 31 Boeing 737 MAX 8 jets. The company said it is in contact with Boeing and will continue to be so over the course of the investigation. "We remain confident in the safety and airworthiness of our fleet of more than 750 Boeing aircraft."
Boeing said it has a team ready to assist in the investigation with Ethiopian and U.S. safety officials following Sunday's crash.
The crash of Lion Air Flight 610 in October drew scrutiny of the new maneuvering characteristics augmentation system, known as MCAS, which officials said they believed pushed the nose of the plane down repeatedly. A nose-down position is the way to recover from a stall but can be catastrophic if the plane signals it is in a stall when it is not. Boeing issued a safety bulletin to pilots in November directing them how to handle if the nose of the plane is automatically pushed down.
Dennis Tajer, a Boeing 737 pilot and spokesman for the Allied Pilots Association, which represents American's pilots, said the airline's pilots met with Boeing staff following the Lion Air crash and that the pilots had not been informed of the new system before the Lion Air crash. Tajer said Boeing's response answered questions about the new system.
"We got the information we needed," Tajer said about the update from Boeing. "We don't fly airplanes we don't feel safe on."
American is confident both in the Boeing 737 MAX 8, of which it operates 24, and the crew that flies them, said spokesman Ross Feinstein. The airline will monitor the investigation and work with the FAA and other authorities, he said.
American's Boeing 737 MAX planes have a special display that shows pilots when the angle of attack of the plane is in disagreement with readings from sensors on the aircraft, said Feinstein.
Southwest recently added the angle-of-attack information to primary flight displays on these aircraft "as an additional control," following the crash of Lion Air 610, according to spokesman Chris Mainz.
United also said it was confident in the Boeing 737 MAX planes. "We have made clear that the Boeing 737 MAX aircraft is safe and that our pilots are properly trained to fly the MAX aircraft safely," said spokeswoman Rachel Rivas.
But flight attendants have expressed concern following the Ethiopian Airlines crash. The Association of Flight Attendants, which represents 50,000 flight attendants at 20 airlines including United, said it was formally requesting that the Federal Aviation Administration investigate the plane.
"While it is important that we not draw conclusions without all of the facts, in the wake of a second accident, regulators, manufacturers and airlines must take steps to address concerns immediately," said AFA's international president Sara Nelson.
"We extend our heartfelt sympathies to the families and loved ones of the passengers and crew on board and stand ready to support the Ethiopian Airlines team," Boeing said in a statement.
The NTSB said it is sending a four-person team to the crash site and the FAA said its staff also plans to assist in the investigation. General Electric, which manufactured the Boeing 737 MAX 8's two CFM LEAP-1B engines as part of its joint venture with France's Safran, is also aiding investigators, it said in a statement.
Boeing declined to comment beyond its statement.
If any fixes are needed for the plane, "it's something they're going to have to get on top of instantly because it does echo what happened with Lion Air," said Richard Aboulafia, a vice president at aircraft analysis firm Teal Group.
He added, however, that the investigation of the Ethiopian crash is too recent to draw conclusions.
The crash is a blow to Ethiopian Airlines' ambitious growth plans. It first ordered the Boeing 737 MAX jets in 2014 in an effort to become the "leading airline group in Africa." The airline took delivery of the first one in July 2018 and has six in its fleet, the company said Sunday.
Ethiopian Airlines has in recent years ordered brand-new Boeing narrow-body and wide-body jets while adding service to cities including Washington, D.C., and Chicago. It also ordered new planes from Boeing's European rival Airbus. The carrier serves 107 international destinations from its Addis Ababa hub, according to the airline's website.
The captain of the plane, a senior pilot with an "excellent" record, had reported having difficulty on board Flight 302, asked to turn around and was given clearance to do so, Ethiopian Airlines CEO Tewolde GebreMariam told reporters on Sunday. The plane had arrived from Johannesburg on Sunday morning before its fatal flight in Ethiopia.
CNBC's Fred Imbert contributed to this report.