Plane maker Boeing’s stock has taken another tumble after Wall Street analysts downgraded the company’s shares in the wake of an incident with its aircraft earlier this month and a resulting safety investigation.
He shared his skepticism that Boeing would receive a “clean” audit from the Federal Aviation Administration (FAA), noting that the company is at risk of significant production and delivery delays.
“Boeing has struggled with quality issues for some time, [the] FAA’s audit is limited to MAX 9 for now, but it’s feasible that findings could expand the scope to other MAX models sharing common parts,” Mr. Akers wrote. “Given Boeing’s recent track record, and greater incentive for FAA to find problems, we think the odds of a clean audit are low.”
The Wells Fargo analyst’s price target went to $225 per share from $280.
Following the report, Boeing’s stock slid by 8 percent, just shy of the nearly 10 percent decline that it saw in the wake of the Alaska Airlines-operated flight incident on Jan. 5.
FAA Grounds Boeing 737 MAX 9 Aircraft
The door plug—a two- by four-foot panel covering an unused emergency door on the jetliner—blew out on the Boeing 737-9 MAX at about 5:11 p.m. local time, roughly six minutes into the flight, when the aircraft reached an altitude of about 16,000 feet.It left a gaping hole in the plane and caused a rapid loss of cabin pressure while approximately 171 passengers and six crew members were on board, although there were no fatalities or serious injuries.
The plane door was later found in the backyard of a Portland home.
The agency says the investigation will focus on whether Boeing “failed to ensure completed products conformed to its approved design and were in a condition for safe operation in compliance with FAA regulations.”
The agency also stated last week that it’s planning “new and significant actions” to immediately increase its oversight of Boeing production and manufacturing, including an audit of the Boeing 737-9 MAX production line and its supplier, increased monitoring of Boeing 737-9 MAX in-service events, and an assessment of safety risks around delegated authority and quality oversight.
Boeing Announces Independent Adviser
For its part, Boeing has acknowledged its “mistake” and vowed to remain transparent with the FAA throughout the probe. On Jan. 15, the plane maker stated that it’s taking “immediate actions to bolster quality assurance and controls across our factories.”This month’s incident involving the door plug isn’t the only one to affect Boeing. A design flaw in the 737 MAX has been tied to two fatal crashes: one in Indonesia in October 2018 and the other in Ethiopia in March 2019.
Together, the two crashes, just five months apart, killed all 346 people aboard the planes and prompted a 20-month grounding of the jets.
Also on Jan. 16, Boeing announced that an independent adviser, retired U.S. Navy Adm. Kirkland H. Donald, will lead a “comprehensive” review of the company’s quality control.
In a statement, Boeing said Mr. Donald and a team of outside experts will “conduct a thorough assessment of Boeing’s quality management system for commercial airplanes, including quality programs and practices in Boeing manufacturing facilities and its oversight of commercial supplier quality.”
“Admiral Donald is a recognized leader in ensuring the integrity of some of the most complex and consequential safety and quality systems in the world,” Boeing President and CEO Dave Calhoun said.
“I’ve asked him to provide an independent and comprehensive assessment with actionable recommendations for strengthening our oversight of quality in our own factories and throughout our extended commercial airplane production system.
“He and his team will have any and all support he needs from me and from across The Boeing Company.”
