Mystery deepens around crash of China Eastern flight
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The mystery of the China Eastern Airlines (NYSE:CEA) flight that crashed last week in China deepened after authorities said there was no evidence of explosive materials in the wreckage for the flight that crashed with 132 people on board.
"Lab tests taken of 66 samples, 41 of which have been completed, showed no major common inorganic explosive or common organic explosive substances have been found," confirmed fire official Zheng Xi.
That finding is preliminary and not enough to rule out a terror attack of some sort on the plane. An illness by the pilot or intentional act to crash the plane have also not been ruled out, although it has been reported that all three pilots on board had good performance records and stable family backgrounds.
A transmitter installed close to a missing black box was found in the wreckage, but the actual flight data recorder has not been found yet.
That all leads investigators no closer to finding answers in what was the first commercial plane disaster in China over the last decade.
On Boeing (NYSE:BA): The China Eastern Airlines Corp. Boeing 737-800 NG crashed in the southern region of Guangxi on March 21 while making a flight from Kunming to Guangzhou. Adding to the mystery, the plane plummeted from an altitude of 29,000 feet, but then leveled off for ten seconds before appearing to fall straight down intact. The 737-800 has a strong safety record with only 11 fatal accidents across 7,000 planes since 1997. The crash is unrelated to the MAX crashes as the 737 NG does not have the Maneuvering Characteristics Augmentation System software issues that the 737 MAX aircraft faced. Morgan Stanley kept an Overweight rating on BA following the crash. "Although the stock may be muted in the short-term, we continue to like the setup in the medium to long-term given the information we know today," wrote analyst Kristine Liwag.
On China Eastern: The carrier has grounded its fleet of 737-800s and canceled thousands of domestic flights. "Consumers may not want to fly on a 737 until the cause of the China Eastern crash is determined not to be a design or manufacturing issue," warned Cowen analyst Cai von Rumohr. Identifying the cause of the crash is seen as critical for the airline.
Shares of Boeing (BA) trade about 1.4% lower from where they stood before the crash. China Eastern Airlines Corporation (CEA) is off 9.5%.
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