737 Cracks: Boeing Can't Suffer Any More Black Eyes
The news is another setback for a company that can't afford one. It remains to be seen what liability Boeing may have to take on for the repairs of aircraft like the ones owned by Southwest (LUV). One of Southwest's 737s developed a hole on a flight from Phoenix, forcing the airline to ground planes and cancel hundreds of flights. It faces both repair and loss-of-business costs.
Boeing has also been late a year late in its release of a new version of the 747, which will be marketed to air freight companies. Industry analysts say that this has cost Boeing $1 billion, and given rival Airbus a head start in the large air freight business.
These delays have not done much for shareholders either. Boeing's stock is down almost 10% over the last five years, while the Dow Jones Industrial Average is up about 12%.