The markets have reacted today to the news of a fatal plane crash in China, with shares of both plane manufacturer Boeing and flight operator China Eastern Airlines falling sharply.
Boeing saw its price fall as much as 9% during premarket trading, recovering some of the losses through the day but closing 3.6% down. China Eastern saw losses of 6.5% by the close of trading in Hong Kong.
China Eastern Airlines flight MU5735 was flying to Guangzhou from the southwestern Chinese city of Kunming when it suddenly lost altitude and crashed into the mountainside in Wuzhou, southern China. Footage from the aftermath showed a large fire at the crash site as rescuers searched for survivors. It is believed that all 132 people on board the flight were killed.
Today’s crash follows events over the past few years that has put the Boeing’s safety practices under intense security. The firm notably had its 737 MAX model grounded worldwide in March 2019 following two crashes killing a total of 346 people, and subsequent investigations found that the company had covered up a known fault. Boeing paid a settlement of over $2.5 billion in penalties and compensation relating to this incident.
The 737 MAX was cleared to fly again in the US in November 2020, and the majority of the world soon followed suit. One country that still hasn’t allowed the plane to take to the skies though is China, who were expected to give the plane clearance next month but could well postpone a decision until investigations into the latest incident are concluded.
At present there is no clear indication as to what caused the crash, but should Boeing be found to be at fault once more there can be major ramifications expected for the company, and a knock-on effect on the US economy in general. Boeing is the country’s largest manufacturing exporter and a core contractor for the federal government, as well as being a major employer in the US.