WASHINGTON (Reuters) – The United States on Wednesday joined Europe, China and other countries in grounding Boeing Co’s 737 MAX jets, because of safety concerns after an Ethiopian Airlines plane crash that killed 157 people, the second disaster involving the 737 in less than five months.
The world’s biggest planemaker is facing its most serious crisis in years, as the decades-old 737 program, one of its most reliable sources of cash and profits, takes a severe blow to its prestige.
The U.S. Federal Aviation Administration (FAA) cited new satellite data and evidence from the scene of Sunday’s crash near Addis Ababa for its decision to ground the planes.
It was the second time the FAA has halted flights of a Boeing plane in six years. It had grounded the 787 Dreamliner in 2013 because of problems with smoking batteries.
Shares of the Seattle-based company ended up 0.5 percent at $377.14, recovering from a more than 3 percent fall in the afternoon when the FAA announcement was made.
Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, said the grounding gives Boeing time to address any problems and not face another potential disaster.
U.S. airlines that operate the 737 MAX, Southwest Airlines Co, American Airlines Group Inc and United Airlines, said they were working to re-book passengers.
Southwest is the world’s largest operator of the 737 MAX 8 with 34 jets, while American flies 24 MAX 8s and United 14 MAX 9s.
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Shares of Southwest fell 0.4 percent.
“The agency made this decision as a result of the data gathering process and new evidence collected at the site and analyzed today,” the FAA said in a statement, shortly after U.S. President Donald Trump announced the planes would be grounded.
“This evidence, together with newly refined satellite data available to FAA this morning, led to this decision.”
The grounding will remain in effect as the FAA investigates.
Boeing, which maintained that its planes were safe to fly, said in a statement that it supported the move to temporarily ground 737 MAX flights.
“Boeing has determined – out of an abundance of caution and in order to reassure the flying public of the aircraft’s safety – to recommend to the FAA the temporary suspension of operations of the entire global fleet of 371 737 MAX aircraft.”
The still-unexplained crash followed another involving a Boeing 737 MAX in Indonesia five months ago that killed 189 people. Although there is no proof of any link, the twin disasters have spooked passengers.
France’s air accident investigation agency BEA will analyze black-box cockpit voice and data recorders from the crashed plane, a spokesman said.
The French announcement resolved uncertainty over the fate of the two recorders after Germany’s BFU said it had declined a request to handle them because it could not process the new type of recorder used on the 737 MAX jets, in service since 2017.
Travel website Kayak was making changes to let customers exclude specific aircraft types from searches, and booking sites were looking to reroute passengers.
The grounding was welcomed by air workers in the United States. John Samuelsen, international president of the Transport Workers Union of America, which represents aviation workers and flight attendants, said the grounding of the fleet was right “both for air travelers and aviation workers.”
NEW SATELLITE DATA
Canada also grounded 737 MAX jets on Wednesday, saying satellite data suggested similarities to the previous crash involving the same plane model in October.
U.S.-based aircraft-tracking firm Aireon provided the satellite data to the FAA, Transport Canada and several other authorities, company spokeswoman Jessie Hillenbrand said.
Aireon’s space-based system can monitor data from aircraft equipped with Automatic Dependent Surveillance-Broadcast (ADS-B) transponders. The data is considered less detailed than that in black boxes, which look at systems running inside the plane.
Ethiopian Airlines spokesman Asrat Begashaw said it was still unclear what happened on Sunday, but its pilot had reported control issues as opposed to external factors such as birds.
“The pilot reported flight control problems and requested to turn back. In fact he was allowed to turn back,” he said.
The chairman of the U.S. House of Representatives Committee on Transportation and Infrastructure, Democrat Peter DeFazio, called for a probe into why the 737 MAX received certification to fly.
“There must be a rigorous investigation into why the aircraft, which has critical safety systems that did not exist on prior models, was certified without requiring additional pilot training,” he said.
Panama’s Copa Holdings said it would also suspend operations of its six Boeing 737 MAX 9 aircraft, but Latin America has largely left it up to carriers to make their own decisions. As of Wednesday night, regulators in Brazil, Argentina and Mexico, the largest air travel markets in the region, had not forced the grounding of planes.
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