Boeing Shares Lower As DoJ Opens Criminal Investigation Into Alaska Airlines 737 Blowout

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by Tyler Durden
Monday, Mar 11, 2024 - 03:05 PM

Boeing Co. shares dipped in premarket trading following a Saturday report from the Wall Street Journal explaining that the US Justice Department has initiated a criminal probe into the incident involving an Alaska Air flight, during which a door plug ripped off a brand new 737 Max mid-flight. 

Citing documents and people familiar with the matter, WSJ said federal investigators have "contacted some passengers and crew" about the Jan. 5 incident. 

"In an event like this, it's normal for the DoJ to be conducting an investigation. We are fully cooperating and do not believe we are a target of the investigation," Alaska Airlines said.

The DoJ's probe aims to determine if any factors leading up to the door plug incident might impact Boeing's 2021 deferred prosecution agreement with the federal agency, established in the aftermath of the two deadly 737 Max crashes in 2018 and 2019. It's important to note that investigations do not always lead to formal charges of wrongdoing. 

Under the agreement with the DoJ, Boeing committed to abiding by all laws and terms of the agreement. In the case of any breach in a deferred prosecution agreement, federal prosecutors are released from the obligations of the arrangement and have the discretion to pursue criminal charges. 

News of the DoJ probe sent Boeing shares down 1% in premarket trading in New York. 

On Sunday, US Transportation Secretary Pete Buttigieg joined Fox News and explained that the Federal Aviation Administration would 'rigorously' probe Boeing. He said that maintaining airline safety requires "an enormous amount of rigor in dealing with Boeing and any regulatory issue." 

Meanwhile, Boeing and federal regulators have their hands full after several aircraft incidents last week