The crash of an Air India 787-8 Dreamliner jet minutes after taking off on Thursday poses another challenge for Boeing, whose new CEO has been trying to rebuild trust following a series of safety and production challenges.
It was not clear what caused the crash, as air disasters can occur for a number of different reasons. The London-bound plane crashed in India's western city of Ahmedabad, authorities said, killing at least 260 people on board and on the ground, in the world's worst aviation disaster in a decade.
The disaster muddies the efforts of CEO Kelly Ortberg to move past its recent issues after the planemaker hit production targets in May and received a vote of confidence from airline bosses in recent months.
Shares were lastly down almost 5% on Thursday. Boeing said it was aware of the initial reports and was working to gather more information.
Before the crash, airline executives had been voicing greater confidence in Boeing's rebound in deliveries and in Ortberg's leadership after years of reputational damage for the planemaker.
At a recent summit in New Delhi, executives were more optimistic over Boeing's crises around safety and regulation. The widebody 787 planes, one of the most modern passenger aircraft in service, have never had a fatal crash until the Air India incident. They were grounded in 2013 due to battery issues, but no one was reported injured.
"It's a knee-jerk reaction (to the incident) and there's revised fears of the problems that plagued Boeing aircraft and Boeing itself in recent years," said Chris Beauchamp, analyst at IG Group.
Boeing's narrowbody 737 Max jets were grounded for years following two fatal crashes and have faced years of scrutiny and production delays. Last year, the U.S. planemaker came under renewed scrutiny after a door plug blew off a 737 Max 9 mid-flight, prompting a temporary FAA grounding and fresh concerns over quality control.
Shares of Spirit AeroSystems, a key supplier, and GE Aerospace, which makes engines for the jet, also fell about 2% each. GE Aerospace said it has activated its emergency response team and would support the investigation, but did not specify if the Air India aircraft was equipped with its engines.
Boeing's outstanding debt also sold off modestly after the crash. Its bonds maturing in May 2029 were trading at 88 basis points over Treasuries, or 10 basis points wider than on Wednesday, according to a bond broker.
