By Jon Sindreu
Boeing’s 737 MAX model just doesn’t seem able to outfly bad publicity. Even if the latest problem is just with one specific plane, its manufacturers will pay the price of greater scrutiny.
Early Monday, futures markets pointed to an 8% fall in Boeing’s share price as investors tried to assess the potential damage inflicted by a door plug that blew out of a jet flown by Alaska Airlines on Friday evening. The Federal Aviation Administration grounded planes Saturday and ordered airlines to conduct inspections.
The MAX has become one of the most infamous jet models in the history of commercial aviation. Most of the planes were grounded for nearly two years after 2019 following two deadly crashes. Since the ban on flying them was lifted, a raft of manufacturing glitches have delayed Boeing’s plans to increase production. Just this past December, the company warned about potential loose bolts in the rudder system. Production had been halted in the summer because of mis-drilled holes on fuselages.
Of course, issues involving the body of the aircraft point the finger at the firm that supplies it, Kansas-based Spirit AeroSystems, which is responsible for the emergency-door configuration involved in Friday’s accident. Futures suggested that Spirit stock could lose almost a fifth of its value Monday.
But the fallout from the Alaska Airlines accident may have more to do with ongoing reputational damage than direct financial consequences.
The jet involved is a MAX 9, which is an elongated variant of the MAX 8 responsible for the 2019 groundings. Alaska and other airlines often don’t use all the extra space it offers, and are thus allowed to dispose of an emergency exit and plug the door instead.
An auto-pressurization failure light had lighted up in the affected plane’s cockpit in prior days. The aircraft had been delivered to Alaska Airlines in November and had only completed about 150 trips. Yet the predecessor to the MAX 9, the 737-900ER, has undertaken millions of flights since 2007 without incident, despite having the same approach to the door.
So the problem could be a one-off. To be sure, it is too early to tell. The missing plug was recovered Sunday and will contain important clues.
Even if it does turn out to be a widespread issue, the result wouldn’t be catastrophic. The MAX 9 is very unpopular compared with its competitor, Europe’s Airbus A321neo, and only makes up 2% of the MAX jets on order at Boeing.
There are 217 of them in service, out of roughly 1,300 MAX jets, with 179 using the plugged-door configuration. United Airlines flies 79, but they only make up 7.5% of its available seats adjusted for trip length, according to analysts at Cowen. Alaska and Panama’s Copa Airlines are bigger potential victims, as the model variant accounts for 32% and 37% of their capacity, respectively.
Still, door inspections are easy and unlikely to take much longer than four hours. Many have already been completed without issue. That this happened during the winter lull reduces the financial hit for carriers.
Given that the MAX remains Boeing’s bestselling aircraft despite everything that has happened, it seems unlikely that existing orders and production rates will be affected. Jets aren’t consumer-facing products: Once regulators give the green light, airlines only care about flight economics.
Still, constant bad headlines have consequences. Officials may feel more inclined to take their time with the certification process for Boeing’s MAX 7 and 10 variants — which sit at the bottom and top of the size spectrum, respectively. Crucially, the plane maker recently asked for the MAX 7 to be exempted from safety standards designed to prevent engine housings from overheating until May 2026, so it can start deliveries as it develops a fix.
A damaged brand may also deter new airline customers. China hasn’t ordered MAX planes since 2017. Carriers may start placing greater value on older, tried-and-tested planes at the expense of newer, issue-prone models.
Despite a recent rebound, shares in Boeing and Spirit are down about 30% and 60% over the past five years, respectively, whereas Airbus’s are up 60%. If more investors are to jump back in, American aircraft manufacturing must stop putting up signs saying “zero days since last incident.”
Write to Jon Sindreu at jon.sindreu@wsj.com