Boeing crash woes set to wipe $21 billion off market cap, dragging Dow lower, after China and Ethiopia to.. – Business Insider

Boeing

• Boeing shares were set to drop at least 9% at Monday’s market open, wiping about $21.5 billion off the company’s market capitalization.
• Questions are being asked about the manufacturer after the second crash in six months involving one of its Boeing 737 Max 8 aircraft.
• The latest crash, of an Ethiopian Airlines flight traveling to Kenya on Sunday morning, killed 157 people. China’s aviation authorities told domestic airlines on Monday to ground all flights involving the model in question.

Boeing shares were set to take a $21.5 billion hit Monday morning after the second crash in six months involving one of its aircraft.

An Ethiopian Airlines flight to Kenya crashed Sunday morning, killing 157 people and mirroring a similar incident in Indonesia last October. The US aircraft manufacturer’s safety record is now in question, with Chinese aviation authorities telling domestic airlines to ground all flights involving Boeing’s 737 Max 8 model.

“This tragic incident will be a massive hurdle for Boeing to overcome,” said Jasper Lawler, the head of research at London Capital Group.

Boeing shares were down 9% in premarket trading as of 9 a.m. in London (5 a.m. ET) and were set to drag down the Dow Jones Industrial Average, with futures down 0.8%.

The company has postponed the debut of a new plane, the 777X Jetliner, that was planned for this week in light of the fallout from the Ethiopia crash.

Both flights involved brand-new planes that crashed just a few minutes into their respective flights and that were Boeing’s best-selling aircraft of its type. Boeing sold 580 737s last year, 72% of the company’s total deliveries.

The cause of both crashes is unclear, but the flight-tracking website Flightradar24 detected that Sunday’s flight had shown “unstable vertical speed” before crashing.

In October, a Lion Air flight carrying 189 people went down in Indonesia.