Yeah, but whether the hit is permanent or long lasting is still up in the air (unlike the 737 Max 8). On the one hand this could just turn out to be a coincidence or an easily fixed issue and Boeing's stock will rebound quickly. Or it could mean a massive recall of this model which will hurt Boeing for years to come. The current price is a reflection of this uncertainty and it could go either way.
It wouldn't surpise me if this were the final nail that shifted global orders toward the A320 Neo. Boeing has been putting lipstick on a pig with the 737 for 20 years now and people know it. They've only held out so long on their reputation at this point, and now that's in the gutter. The A320 Neo is an all around better, more modern aircraft built with computerized systems in mind from the ground up.
The 737 was a 30 year old airframe 20 years ago. Boeing was really trying to sneak past regulators on this one - reading pilot forums, people are also complaining about avionics updates that they didn't get any re-training for either.
The only commonality is these are both scandals and probably cover-ups - and generally negative headlines for both companies. The difference is there's been a significant death toll in the case of BA. You can argue the same for diesel emissions - but not really along the same dimension. ie: people dying of lung cancer vs people dying in a plane crash..
If you wanted to find the "fair value" price of BA you have to discount its future cash flows to the present. If BA planes are perceived as unsafe - what does this mean for future purchase orders? Does Airbus edge up ahead over time? Do people diversify their fleet with the new China-made jetliners?
From today's perspective, the stock is still in the middle of a crisis that is unfolding. It is impossible to know how much further down it will go as new data-points are revealed. How long will a fix take? Have commercial jetliners ever been recalled en masse?
Short-term trades are more fun than fundamental positioning, in this case, IMHO. Betting on continued high volatility via the options market is probably the safest way to go - as opposed to betting on directionality of the stock. Timing is everything. Happy trading...
They're basically like car recalls: You take the plane to maintenance and they swap out the bad doodad. Boeing had a very public one like this with the 787 batteries when it first launched; they made some changes and now it's an incredibly popular plane. But in general, they're happening all the time for basically every plane, just not catching much public attention.
Source: Career spent as a Wall Street Trader