Lou Whiteman, The Motley Fool
3 min read
In This Article:
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Boeing shares are reacting to a fatal 787 Dreamliner crash in India.
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Investors need to know that it will likely take months, if not years, to determine the factors that caused the accident, and should try to avoid reacting to headlines.
A Boeing (NYSE: BA) 787 Dreamliner carrying 242 people crashed in India, reportedly leaving few, if any, survivors.
Though the human tragedy is the primary focus, the incident also raises fresh concerns about safety. Shares of Boeing traded down 5% as of 10 a.m. ET, and shares of engine maker GE Aerospace (NYSE: GE) were down 2%.
Air India flight 171 took off from Ahmedabad en route to London, but crashed shortly after takeoff, according to reports. It is the first fatal incident involving a Dreamliner, which has been in service since October 2011.
It will take months, if not years, to determine the cause of the incident, and there are a wide range of potential factors, including weather, human error, and maintenance that will be considered on top of manufacturing issues.
But for Boeing, which is in the process of rehabilitating its reputation after a pair of fatal accidents involving its 737 MAX aircraft, the incident creates fresh investor uncertainty just as the company appeared to be regaining its footing.
The best advice for investors is to do nothing at all. Expect there to be few definitive conclusions about what happened for some time, and in many cases, incidents like this are the result of a cascade of different factors.
Even before today's incident, Boeing investors were in for a long journey. The aerospace company expanded its total debt by more than 400% during the pandemic and still faces government production restrictions on the 737 MAX that limits its cash flow and its ability to pay down that balance.
Boeing has refreshed its management and is making strides to meet government requirements to expand production. We're still far from drawing any conclusions about whether the Air India incident will impact the company's course.
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