Shares of Boeing and Spirit AeroSystems plunge after mid-air blowout (NYSE:BA)

A weekend plane accident that could have ended in tragedy continues to make waves, putting a spotlight on the industry and what it might mean for one of America’s leading exporters. A so-called door plug on Alaska Airlines (NYSE:ALK) Flight 1282 blew out on Friday evening, causing the cabin aboard the Boeing (NYSE:BA) 737 Max 9 to rapidly depressurize only 6 minutes after it departed the Portland International Airport. Luckily, the jetliner was cruising at an altitude of 16,000 feet, and no one was sitting in the two seats next to the affected area, though things could have ended a lot differently if the plane was flying much higher.

Clues: A probe is underway to examine the door plug, a panel where an optional emergency exit can be placed in the event a plane is manufactured with a high capacity seating configuration. All of Alaska Airlines’ (ALK) aircraft are permanently “plugged,” leading many to speculate that something may have been wrong with the installation of bolts or the pressurization system aboard the plane. In response to the accident, the FAA temporarily grounded 171 Boeing (BA) 737 Max 9 planes worldwide, requiring fresh inspections and safety checks before the plane variant returns to service. The missing door plug has also been located in the backyard of a Portland, Oregon-area resident.

It’s bad news for Boeing (BA) shareholders as the stock opened the premarket session on Monday down 8.4% to $228. Aerospace supplier Spirit AeroSystems (NYSE:SPR), which manufactures and installs the door plugs in question, also tumbled 16.5% in early trade to $26.50/share, with both companies involved in the complex, two-tier installation process. SA Investing Group Leader Dhierin Bechai believes the latest investigation will solely focus on the Boeing 737 MAX 9 (with deactivated doors) of which Boeing has around 300 in backlog by November 2023 and over 200 airplanes delivered.

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