Yahoo Finance Boeing's worth $41 billion less than it was a week ago
Boeing has lost around US$29 billion (AU$41 billion) in value since an Ethiopian Airways 737 Max 8 flight crashed on Sunday, killing all 157 people onboard.
Boeing shares (NYSE:BA) have continued to slide as increasing numbers of countries – including Australia – and airlines move to ground the controversial jet, which was also involved in the October 2018 Indonesian Lion Air crash which killed 189.
As of Friday morning Australian time, Boeing’s share price has lost more than 12 percent – losing 5 percent on Monday, another 6 percent on Tuesday before slumping further on Thursday.
Related story: Boeing Drops Most Since 2001 as Second 737 Crash Grounds Flights
Related story: These are the airlines that flew the Boeing 737 MAX 8 in Australia
Related story: China, Ethiopia ground MAX 8s after crash
But it doesn’t end there
Boeing could also be forced to stop production and deliveries of the jet, costing the company more than US$5 billion. It’s already suspending all delivery of the jets.
That’s 5 percent of Boeing’s annual revenue.
The Boeing 737 was previously the best-selling jet in history, and the new Max 8 was meant to be a good option for mid-range flights.
The jets cost more than US$100 million (AU$141 million) to build. If all airlines with orders cancel their purchases, that would be another US$57 billion (AU$81 billion) impacted, Bloomberg reports.
It’s likely that Boeing will shoulder this cost, as an airworthy guarantee is usually part of the purchase or order contract, Morningstar analyst Chris Higgins told RT.
Facing potential compensation demands
According to Reuters analysis, the initial compensation costs for the 157 passengers who died could be around US$25 million (AU$35 million).
But airlines, like Norwegian Airways, are also demanding compensation for their grounded jets.
“It is quite obvious we will not take the cost related to the new aircraft that we have to park temporarily,” the CEO of Norwegian Air, Bjørn Kjos said in a recorded message to customers.
“We will send this bill to those who produce this aircraft.”
"I would like to apologize to those customers who have been affected by the temporary grounding of our 737 MAX aircraft. Our customers are our main priority now," says Norwegian's CEO Bjørn Kjos. #flynorwegian pic.twitter.com/xZLmKTIa0A
— Norwegian (@Fly_Norwegian) March 13, 2019
India’s SpiceJet is also seeking compensation for lost flight time, the maintenance, repair and overhaul for its 12 grounded jets.
“We will seek compensation from Boeing for the grounding of the planes. We will also seek re-compensation for revenue loss and any kind of maintenance or technical overhaul that the aircraft will have to undergo. This is part of the contract, which we signed with Boeing for all the 737 MAX aircraft,” an unnamed senior SpiceJet executive told Business Standard.
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