Boeing falls as South Korea orders B737-800 inspection

Boeing shares fell nearly 5% in premarket trading on Monday, after South Korea ordered an inspection of all B737-800 planes, the model involved in a fatal Jeju Air crash over the weekend.

Acting President Choi Sang-mok told the transport ministry to carry out an emergency safety inspection of the country’s entire airline operating systemwhile the officials of the Ministry of Land, Infrastructure and Transport (MOLIT) said that they will carry out a “comprehensive special inspection of the B737-800”.

New York-listed Boeing shares were down 4.7% in premarket trading before paring losses to trade 4% lower at 6:10 am ET.

Uncertainty surrounds the exact circumstances of the crash, which killed 179 of the 181 people who were aboard the flight on Sunday. The plane landed without the correct gear deployed at Muan International Airport in South Korea, skidded off the runway and crashed into an exterior wall before bursting into flames. The survivors were two crew members who were pulled from the wreckage.

In a briefing on Monday, MOLIT said the plane’s pilot had mentioned a “bird strike”, minutes after the airport’s control tower issued a warning of the activity birds The pilot also warned the control tower of a “go,” referring to an aborted landing attempt, and declared “Mayday,” said Yu Kyung-soo, director of aviation security policy at MOLIT, according to NBC News Translation.

Two black boxes were recovered from the plane and have been sent for analysis. Meanwhile, the US National Transportation Safety Board is leading a team of US investigators, including the Federal Aviation Administration and Boeing, to assist the Aviation Accident Investigation Board and the South Korean Railway with an investigation into the accident.

MOLIT officials said on Monday that they were reviewing the concrete wall that the aircraft hit for its connection to the accident.

They also said that they will conduct a “complete special inspection of the B737-800 model”.

The famous Boeing narrowbody aircraft has been in operation for almost three decades, with development predating it the US manufacturer’s troubled B737-Max jetsa later iteration of the model.

The B737-800 is widely used by South Korean low-cost carriers, MOLIT said on Monday, with Jeju Air the largest operator with 39 jets. Other operators include T’way Air, Jin Air, Eastar Jet and Air Incheon, while the flag carrier Korean Air has two of the model.

“We will examine compliance with various regulations, including operational records, inspections and maintenance performed before and after flights,” Ju Jong-wan, director of the Aviation Policy Office at MOLIT, said on Monday. , according to the translation of NBC News.

“We plan to review the enforcement regulations regarding bird strikes, identified as a potential cause of the accident, especially for new airports under construction.”

CNBC has contacted Boeing for comment.

Local media reported that another Jeju Air plane of the same model returned to South Korea’s Gimpo Airport shortly after takeoff on Monday after reporting problems with its landing gear.

In a press briefing on Sunday, the head of the management support office at Jeju Air, Song Kyung-hoon, said that the airline would support the victims and their families, and that the aircraft was covered by a $1 billion insurance. according to the news site Maybe

Song also denied that mechanical faults or inadequate safety preparations played a role in the crash.

“This crash is not about any maintenance issues. There can be absolutely no compromise when it comes to maintaining the aircraft,” said Song.

Jeju Air shares hit Monday’s lowest, according to FactSet data, and closed 8.65% lower.

— CNBC’s Yeo Boon Ping contributed to this story.