Boeing saw its stock plummet on Monday after admitting fault in two recent deadly plane crashes involving its 737 Max jets.
Last week, Boeing CEO Dennis Muilenburg said "it's apparent" that the 737 MAX 8's MCAS maneuvering system contributed to the two fatal air accidents.
Boeing shares plummeted as much as 4.4% to $374.88 for the biggest drop in about four weeks.
American Airlines, one of the largest USA air carriers will extend the ground term for the use of Boeing 737 MAX until June 5. Southwest Airlines, which also flies Boeing 737 MAX aircraft, took similar measures last month.
Spirit Aerosystems produces parts of the aircraft for Boeing, including 70% of the fuselage, produced in Wichita, Kansas, and wing components produced in Oklahoma locations. The longer the grounding lasts, the more unlikely it is that suppliers will emerge from this debacle unscathed.
(Michael Tewelde/AFP/Getty Images) People stand near collected debris at the crash site of Ethiopia Airlines near Bishoftu, southeast of Addis Ababa, Ethiopia, March 11, 2019.
Boeing is under huge pressure to update software in its airplanes.
"The grounding of the MAX fleet is likely to lower domestic capacity by ~1-1.5 ppts during the period in question, which could bode well for domestic industry fares primarily in the off-peak periods where there appears to be an oversupply", Syth said.
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Boeing chose to cut 737 production to 42 airplanes per month, down from 52, starting in mid-April, according to the company.
Boeing Co.'s 737 Max crisis has been largely self-inflicted, but now it's passing some of consequences onto its suppliers.
CFRA Research maintained a "buy" rating on Boeing despite trimming the earnings estimate for 2019.
Boeing is set to report the number of planes it delivered during the quarter.
"Once again corporate greed has prioritized profits over safety with tragic consequences for the public", attorney Nomaan Husain said. These announcements break with a tradition of accepting the certification of the company's home regulator, in this case the US Federal Aviation Administration.
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.
"Airlines generally lose their deposits if they cancel orders and Airbus does not have the capacity to ramp up production significantly in the short term to replace canceled Boeing orders".