Shares in US aircraft manufacturer Boeing are trading down just a little under 1% premarket on Monday. Boeing has been back in the headlines this week. This is due to reports on the testimony of two of the company’s top executives regarding two fatal crashes in recent years.
Transcripts Under Scrutiny
Bloomberg News reported on transcripts of interviews it obtained involving Keith Leverkuhn and Michael Teal, both of whom were vice presidents in charge of the engineering development work on the 737 Max aircraft.
Interviews were conducted with the House Transportation and Infrastructure Committee. The two VP’s said that they were unaware of the specifics regarding certain safety features, which would have been left down to lower-level employees.
Decisions Left To Lower Level Employees
The transcripts reported on by Bloomberg, show Teal saying:
“The technical leaders well below my level would have gone into that level of detail.”
The system in question is the Manoeuvring Characteristics Augmentation System. This was confirmed by investigators as the catalyst for the fatal crash off the Indonesian coast in 2018.
Following this crash, the system was highlighted as the cause of another crash off the coast of Ethiopia in 2019. As a result of the two accidents, a total of 346 lives were lost. This led the 737 Max to be grounded.
However, the US Federal Aviation Administration is currently reviewing the aircraft. It could be back in service as early as the end of the year.
The FAA is currently reviewing the pilot-training requirements for Boeing pilots. All pilots are required to do flight simulator training. Previously, the company has decided that pilots who flew previous models of the 737 would not need simulator training. Instead, they would receive a short course highlighting the difference between the two models.
European Test Flights Underway
In Europe, Boeing has been conducting a round of test flights with the European Union Aviation Safety Agency. They are due to report this week on its evaluation. This offers further encouragement for Boeing that it will be able to get its most popular model back in service. Replacing the cash flow lost as a result of grounding the 737 Max has been a big challenge for Boeing over the last quarter. This situation was exacerbated by production challenges in manufacturing Boeing’s other main aircraft, the 787 Dreamliner.
Boeing reported Q2 earnings per share of -$4.19. This wildly missed expectation for a -$2.55 reading. The company is next due to report on October 21st, with the market looking for a -$2.01 result.
Boeing Shares Turn Lower Again
Shares in Boeing have been moving lower again over recent weeks despite price earlier breaking above the bearish trend line from 2020 highs. The breakout failed at the 185.04 resistance level and price has since moved back down towards the 154 level support. While this level holds, a further rotation higher could still play out.
However, if price breaks below there, the next support is down at the 119.28 region. A retest of the broken trend line comes in just ahead.