Boeing cuts production of 737 MAX after crashes

Boeing cuts production of 737 MAX after crashes

Boeing faces its most significant reputational crisis in decades, stemming from two crashes of its 737 Max 8 jets, which killed 346 people in Indonesia and Ethiopia. As the industry prepares to kick off airline earnings on Wednesday with Delta, Raymond James suggests that American and United might be smarter plays for investors looking for less 737 Max risk.

Nearly a month into Canada's grounding of all Boeing 737 MAX 8 and 9 fleets, the company responsible for the aircrafts says it will be cutting its production this week.

American, for its part, also believes the grounding may last that long, and canceled flights on the affected plane through at least June 5 on Monday.

In March, American saw the first impact of the plane's grounding on its service, and canceled the 90 daily flights through April 24.

Canacccord Genuity cut its price target on Boeing shares to $380 from $391.93 and said it now saw July 2019 as the date the MAX grounding could be lifted "in a best-case scenario". Another research proved that the Ethiopian airlines faced the fatal crash because a sensor erroneously triggered the anti- stall system; this system is named as the Maneuvering Characteristics Augmentation System (in short, MCAS).

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The company's delivery numbers for March are due to be published on Tuesday and are expected to show customers took less than half of a previous consensus estimate of 46 planes as the groundings prevented flights.

"Regaining the Boeing 737 Max airworthiness certificate is not just a simple software fix", Epstein warned in a client note. It alleges that Boeing "actively concealed the nature of the automated system defects" and, in doing so, demonstrated a "conscious disregard for the lives of others".

While the Lion Air and Ethiopian Airlines crashes have strong similarities, it is still unclear what the link between the two is.

The lawsuit was filed in U.S. District Court in Chicago, where Boeing is based, on behalf of the family of Mucaad Hussein Abdalla. Jefferies expects Boeing to deliver 497 737 MAX planes, down from 580. "It's our responsibility to eliminate this risk", Muilenburg said in a video statement. But this underscores the fact that this is a process that can't be rushed, especially as global regulators feel compelled to piggyback on the FAA with safety reviews of their own amid uncomfortable questions about whether the organization was too cozy with Boeing to catch and prevent these problems ahead of time.

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