The crash of a Boeing jet in China on Monday is the latest crisis for the American plane manufacturer, raising the prospect of renewed regulatory scrutiny and confronting the company with another catastrophe involving its planes.
It could be weeks or even months before investigators know what caused the crash of the China Eastern Airlines Boeing plane with more than 130 people on board. The outcome of the investigation could affect Boeing, which recently overcame years of troubles involving a newer variant of the single-aisle737, the Max, and has had long delays in producing and delivering the twin-aisle 787 Dreamliner.
Rob Spingarn, a managing director at Melius Research, said that it was important to see what happened with the incident.
Many industry analysts and experts were not inclined to conclude that Monday's crash indicated a fundamental design flaw in the plane. Boeing's stock fell 3.6 percent. China Eastern's shares ended down in Hong Kong.
Boeing is an icon of the aviation age and is the largest manufacturing exporter in the United States. One of the federal government's biggest contractors.
It was the best year for sales in two years, with net orders of 535 planes. The company had a loss of $4.2 billion for the quarter due to a charge in the final three months of the year from the delays of the Dreamliner.
Boeing had to contend with an industry slowdown due to the coronaviruses, as well as difficulties with the Max and the Dreamliner. With air travel only slowly recovering, airlines have stopped buying new planes.
Daily business updates The latest coverage of business, markets and the economy, sent by email each weekday.Boeing's recent problems began with the Max, which was widely criticized after one of the planes crashed in Indonesia and another in Ethiopia. The Max was grounded around the world after the second crash, which killed all 346 people on the planes.
Billions of dollars in fines, settlements and lost orders were brought by the disasters. The United States approved the Max for flight again in late 2020, requiring Boeing to make certain changes to the plane. Regulators in China granted approval in early December.
The plane was expected to resume flying there in the coming months. The return of the Max could be linked to the investigation into the crash of the previous model, analysts said.
The Max is the only airliner that uses the flight-control software known as MCAS. When the plane was upgraded from the Next Generation line, the system was introduced to the Max.
On Monday, Boeing said that it was in contact with China Eastern Airlines and with the National Transportation Safety Board.
Boeing, the manufacturer of the plane's engines, and the Federal Aviation Administration would contribute technical expertise to the investigation, according to the safety board. Boeing said that its technical experts were prepared to assist China's aviation authority.
The Boeing plane is used in the skies. According to Boeing data, the company delivered more planes between 1998 and 2020 than any other company. It has special appeal for airlines because of its passenger capacity and travel range. Some airlines use single-aisle planes for shorter international trips.
China is an important market for Boeing. According to a data firm, 17 percent of the 25,000 passenger planes in service worldwide are Boeing. Europe is home to over 1,000, followed by China with over 1,200, and the United States with over 800. Southwest Airlines has 205, United Airlines has 136, and Delta Air Lines has 77 in the United States.
The United States is the largest market for Boeing planes. The company predicted last year that the number of commercial planes in China would double by 2040, with airlines there needing 8,700 new aircraft to be built.
The country is crucial to Boeing and its rival, Airbus. China is the largest single-country market for the company, with 142 commercial aircraft delivered last year.
A320 single-aisle planes and A330 wide-body passenger jets are produced at the assembly line in China. It has relationships with Chinese airlines and helicopter operators, as well as Chinese companies that make parts for the jets. The value of industrial cooperation between the two countries increased from $500 million to $900 million.
Boeing's relationship with the country can be complicated. Boeing can find itself at a disadvantage when tensions rise between China and the United States.
They have always been the designated hostage in any kind of U.S.-China standoff, according to Richard Aboulafia, a managing director at AeroDynamic Advisory.
As China's economy cools, so too, could its expanding travel sector, testing Boeing's reliance on the country.
The Comac C919 is a Chinese competitor to the plane. The plane is set to debut this year and poses a long-term threat to Boeing and Airbus in China. Analysts think it could be years before China starts large-scale production and supports its domestic growth with readily available parts and maintenance.
Mr. Spingarn of Melius Research said that all of these things take time to develop.
The reporting was contributed to by Liz Alderman and Keith Bradsher.
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