Sharp decline in Boeing shares after China Eastern crash: company will no longer use 737-800 models

Boeing shares fell more than 5% earlier in the first quotes on Monday after its plane belonging to China Eastern Airlines, with 132 people on board, crashed in the mountains of southern China.

The cause of the accident was not immediately known and the media reported that rescuers had found no sign of survivors. Boeing said it was working to gather more information.

“I can confirm that the plane crashed,” China Eastern Airlines said in a statement. Its US-listed shares plummeted to 15.8% in pre-opening negotiations.

The aircraft involved in the crash was a six-year-old Boeing 737-800 aircraft, according to Flightradar24, a predecessor of the 737 MAX model.

The popular 737-800 variant has a maximum capacity of 189 seats and is equipped with a CFM-56 engine, according to the aircraft manufacturer's website.

The engines are manufactured by a joint venture between General Electric Co and France's Safran SA.

Following the accident, China Eastern Airlines has grounded all Boeing 737-800 aircraft, company officials said.

The crash comes at a time when Boeing is slowly moving towards regulatory approval in China for the 737 MAX aircraft, its main source of revenue, after two fatal accidents in Indonesia and Ethiopia that led to its grounding in the world's largest domestic aviation market.

The aircraft is integral to Boeing's recovery, which is increasing production amid a spike in travel demand.

China Eastern shares also recorded losses of up to 8%. The airline confirmed that there were deaths in the accident and offered its condolences.

“The company expresses its deepest condolences to the passengers and crew members who died in the accident,” said a statement from the company addressed to the listed Shanghai Stock Exchange, without giving any casualties.

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