Boeing fell 5% on Monday, analysts defend: The craftsmanship and design of the 737-800 from 15 years ago are unlikely to be the cause of the South Korean accident

Affected by the news of the air disaster in South Korea, Boeing's stock price plummeted on Monday. The accident resulted in significant casualties, becoming one of the deadliest air disasters in South Korean history. However, some Wall Street analysts believe that the aircraft design from 15 years ago is unlikely to be the cause of the accident.

On Monday, Boeing's stock price fell more than 5% in early trading, closing down 2.3% at $176.55.

Wolfe Research analyst Myles Walton noted in a report on Monday: "The tragic crash of Jeju Air Flight 2216 should not impact Boeing's stock and the current production acceleration challenges faced by aircraft manufacturers for the 737 MAX. The root cause of the accident may involve multiple factors, but issues related to craftsmanship and design from 15 years ago are unlikely to be among them."

Walton maintains a "buy" rating on Boeing stock, with a target price of $195.

On December 29, a Boeing 737-800 passenger aircraft veered off the runway and exploded while landing at Woonan Airport in Jeollanam-do, South Korea. There were 175 passengers and 6 crew members on board, totaling 181 people. The Jeollanam-do Fire Department stated that, apart from the 2 crew members who were rescued, it is expected that all other individuals involved in the accident perished.

The Boeing 737-800 was launched in the late 1990s and has since delivered over 5,000 units. Compared to earlier models and similar products from Airbus, its safety record has been relatively good. The aircraft involved in this incident was manufactured in 2009 and has been in service with Jeju Air since 2017. The airline stated that routine checks had been completed before takeoff.

According to Xinhua News Agency, South Korea's JoongAng Ilbo cited police and fire department sources saying that preliminary investigations suggest the aircraft struck a flock of birds, causing the landing gear to fail to deploy. Yonhap News Agency reported that a malfunction occurred with the landing gear during the landing process, leading the aircraft to veer off the runway and crash into the airport's perimeter wall, resulting in a fire.

Although the cause of the accident is still under investigation, Boeing has faced frequent incidents in recent years, and market confidence has already been quite fragile.

On January 5 of this year, an emergency exit door fell off a 737 MAX 9 aircraft, with the incident attributed to manufacturing quality issues. As of Monday's pre-trading session, Boeing's stock price has fallen approximately 31% this year, and about 27% since the January 5 incident