Skip to main content
Open this photo in gallery:

Employees walk by the end of a 737 Max aircraft at the Boeing factory in Renton, Wash., on March 27, 2019.Lindsey Wasson/Reuters

Shares of Boeing Co. fell 5 per cent on Monday after the company said it would cut production of its 737 Max aircraft, as it struggles with worldwide grounding of the narrow-body jet after two fatal crashes in less than five months.

The production cut also weighed on shares of Boeing’s suppliers across the globe. Spirit AeroSystems, Inc. was 7 per cent lower, while Triumph Group, Inc. dropped 6 per cent. European suppliers such as Meggitt PLC, Melrose Industries PLC and Safran S.A. fell between 0.4 per cent and 2 per cent.

The crash in Ethiopia last month and the crash of a Lion Air plane in Indonesia in October that killed everyone on board have left the world’s largest plane maker facing the worst crisis in its history, with several airlines deciding to hold off taking deliveries.

On Friday, the company cut its monthly 737 production by nearly 20 per cent, signalling it did not expect aviation authorities to allow the plane back in the air any time soon.

“The 737 rate cut to 42/month should help resolve the Max crisis but with a large 2019 cash hit,” the brokerage Cowen wrote in a note on Monday.

Bank of America Merrill Lynch analysts cut Boeing’s rating to “neutral” from “buy” on Monday, saying the 737 delay could last longer than previously expected and estimated 6 to 9 months of disruption versus 3 to 6 months forecast previously.

“We now assume the Max grounding will last at least until July 2019 in a best-case scenario ... the move to 42/month on the 737 indicates to us greater uncertainty on the near- and longer-term outlook for the program and the stock,” Canaccord Genuity analyst Ken Herbert said in a note.

Including Monday’s losses, the grounding has so far wiped off about $26-billion from Boeing’s market value, making it one of the worst performers on the Dow this year.

Report an editorial error

Report a technical issue

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 29/05/24 11:52am EDT.

SymbolName% changeLast
Boeing Company

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe