A passenger stands inside a terminal in front of a China Eastern plane at Shanghai Hongqiao International Airport in Shanghai.
Qilai Shen/Bloomberg
Boeing shares rose on news that the tragic crash of a 737-800 operated by China Eastern Airlines likely wasn’t caused by a plane malfunction.
The Wall Street Journal, citing U.S. officials, reported Tuesday that the crash of China Eastern flight 5375, on its way from Kunming to Guangzhou, was most likely was due to an intentional nosedive. Who put the plane into the nosedive still isn’t known.
Boeing (ticker: BA) and China Eastern Airlines (CEA) didn’t immediately respond to requests for comment. The National Transportation Safety Board, one entity that investigates airline accidents, also didn’t immediately respond to a request for comment. The safety officials’ organization wasn’t identified in the Journal report.
Shares of both companies were higher in Tuesday trading, but so was the overall market. China Eastern stock gained about 1%. The S&P 500 and Dow Jones Industrial Average rose about 1.7% and 1.2%, respectively.
Boeing shares have gained 6.1% to about $131.60. Shares have added about $3 shortly after the publication of the Journal story.
Intentional actions taken by crew members to cause an accident are incredibly rare. A 2015 search by the International Civil Aviation Organization and the Bureau of Enquiry and Analysis for Civil Aviation Safety found 12 situations since 1980 that might fit that description.
The 2015 search was conducted in conjunction with an investigation into the 2015 crash of a Germanwings fight. Cause of the crash was placed on the actions of the co-pilot.
Boeing stock dropped roughly $12 at its lowest point the trading day following the crash. Shares closed March 21 at $185.90, down about $7 or 3.6%. Shares recovered most of that loss the next day and eclipsed the pre-crash high about a week later.
Boeing stock might have a couple more dollars in it for any overhang associated with the crash, although the $3 move looks about right. Coming into Tuesday trading, there hadn’t been many updates since the end of March. The Civil Aviation Administration of China issued a preliminary report on April 26, but it didn’t contain a lot of new information.
Shares of both China Eastern and Boeing have traded lower since the crash.
China Eastern stock has lost about 12%. Boeing shares have lost about 32%. The crash, however, probably isn’t to blame for much of either drop. The S&P 500 is down about 9% over that span. What’s more, Boeing’s first-quarter earnings report disappointed investors, hurting shares. For China Eastern, a resurgence of Covid has hurt demand for air travel.
The earnings disappointment came on April 27. Shares finished down 7.5% that day.
Write to Al Root at [email protected]
