Text size Airline stocks are taking a beating. The stocks of Alaska Air Group (ALK), American Airlines (AAL), United Continental (UAL), and Southwest Airlines (LUV) were all down more than 2% Tuesday after the tragic crash of a Boeing 737 MAX 8. But are all airlines exposed to the aircraft, which has seen two deadly crashes in five months? Here’s what you need to know. The back story. The crash of an Ethiopian Airlines Boeing 737 MAX 8 killed 157 people, and Boeing stock (BA) has taken the brunt of the market reaction. Its shares have dropped 11% during the past two days. But after one day of being out of the market spotlight, airline stocks are falling as reports emerge of flight attendants asking the FAA to investigate the planes, and customers trying to avoid them. What’s new. The market is trying to answer this question itself. Delta Air Lines stock (DAL) has advanced 0.3% to $51.25, while JetBlue Airways stock (JBLU) has risen 0.5% to $16.59. In these cases, the market is not wrong. Neither airline is scheduled to fly the 737 MAX 8 over the next six months, writes Cowen analyst Helane Becker. Other airlines with no exposure to the 737 MAX 8 include Hawaiian Holdings (HA), Spirit Airlines (SAVE), Allegiant Travel (ALGT), Mesa Air Group (MESA), and Skywest (SKYW)—though that hasn’t stopped all except for Hawaiian stock from declining Tuesday. These airlines do use the 737 MAX, according to Becker: WestJet Southwest Airlines: 8.8% of available seat miles are estimated to occur on the 737 MAX in 2019. Its stock has dropped 2.3% to $50.46. Air Canada American Airlines: 1.8% of available seat miles—an industry metric computed by multiplying the number of seats available by miles flown—are expected to occur on the 737 MAX in 2019. Its stock is down 2.3% at $31.30. United: 1.6% of available seat miles are set to occur on the 737 MAX. Its stock has dropped 2.3% to $80.45. Alaska Air: 0.1% of available seat miles are set to occur on the 737 MAX. Its stock is down 2.2% at $54.21. Looking ahead. Becker expects larger companies to be able to adjust even if the airplanes are grounded by the FAA. “Given the size of the American, United and Southwest fleets we expect those companies to have little issues adjusting schedules and back filling aircraft with the B737-800s,” Becker writes. This too shall pass. Write to Ben Levisohn at Ben.Levisohn@barrons.com<doc-sep>Air travelers planning trips in the weeks ahead may want to double check what kind of plane they’re set to fly on. President Trump announced Wednesday that the U.S. will ground Boeing 737 Max 8 and 9 aircraft BA, +0.26% following the Sunday crash of Ethiopian Airlines Flight 302. With the announcement, the U.S. joins a growing number of countries that have grounded the aircraft as authorities investigate whether the plane itself played a role in last weekend’s disaster, which killed 157 people, and the October 2018 crash of Lion Air Flight 610, which killed 189 people. Before Trump’s announcement, the Federal Aviation Administration had maintained the stance that the aircraft was safe and did not recommend grounding it. Don’t miss:Europe and Canada have banned Boeing’s 737 Max — should U.S. passengers be concerned? Other countries that have banned the aircraft from their airspace for now include the U.K., France, Germany, China, India and Australia. The Boeing 737 Max was the plane involved in both crashes, leading some to speculate that a flaw in the aircraft itself could have played a role. However, other aviation safety experts have argued that pilot error, and not the plane and its software, is more likely to blame for the two tragedies. “ ‘Definitely call and check the status of your reservation and ask about your re-booking options. Flights are more likely to cooperate given the public outcry.’ ” — —Tracy Stewart, content editor at Airfarewatchdog With so many countries now barring the aircraft from flying, delays and cancellations could grow as airlines scramble to reassign flights to other planes in their fleet. Here is what air travelers should know and expect in the foreseeable future: Your flight may be delayed or cancelled Airlines have a limited fleet to work with — increasing the likelihood that cancellations or delays may occur as they work to move any unused planes into service to replace the ground Boeing 737 Max aircraft. “Most airlines do not have the capacity to use other planes to carry extra passengers; airlines do not typically have an extra aircraft for every flight,” said Henrik Zillmer, CEO of AirHelp, a company that facilitates pasenger compensation for delayed or cancelled flights. “If airlines act fast and look ahead, they could avoid further chaos by potentially reassigning flights. However, without proactive action, this situation could lead to cancelled or overbooked flights, and ultimately, boarding denials.” Before Trump’s announcement, Zillmer predicted that chaos could erupt in Europe as passengers hastened to rebook affected flights. The good news is that the fallout from this chain of events will be somewhat limited, as there were only 350 Boeing 737 Max 8s in service globally, said Tracy Stewart, content editor at travel deal site Airfarewatchdog. “ Most airlines do not have the capacity to use other planes to carry extra passengers ” — —Henrik Zillmer, CEO of AirHelp Still, some airlines may be more adversely affected than others. Southwest Airlines LUV, +1.09% had more Max 8 aircraft, with 34 of the planes in service, than any other American carrier, meaning it will have to work that much harder to reassign flights. Even before the U.S. grounded the aircraft though, Southwest was letting passengers rebook on another aircraft. In a statement Wednesday, Southwest said the 737 Max aircraft accounted for less than 5% of its flights each day. Customers booked on cancelled 737 Max flights will be able to rebook on alternate flights without any additional fees or fare differences within 14 days of their original date of travel between the two original destinations. “While we remain confident in the MAX 8 after completing more than 88,000 flight hours accrued over 41,000 flights, we support the actions of the FAA and other regulatory agencies and governments across the globe,” the company said. United Airlines UAL, +1.81% said that around 40 flight a day are served by the company’s 14 MAX aircraft typically. ”Through a combination of spare aircraft and rebooking customers, we do not anticipate a significant operational impact as a result of this order,” a United spokesman said. “We will continue to work with our customers to help minimize any disruption to their travel.” Read more:Pilot of crashed Ethiopian Airlines jet reported flight-control problems American Airlines AAL, +2.97% said it has 24 aircraft affected by Trump’s order and that it will “make every effort to rebook customers as quickly as possible.” “Definitely call and check the status of your reservation and ask about your rebooking options,” Stewart said. “Flights are more likely to cooperate given the public outcry.” Consumers could be hard-pressed to get compensation if their flight is cancelled Policies regarding compensation for delayed or cancelled flight vary from country to country and airline to airline. But even in places with the most comprehensive compensation policies, travelers could be out of luck if the Boeing 737 Max grounding situation affect their flight. For instance, in the European Union, regulation stipulates that passengers whose flight arrival at its final destination is delayed by three or more hours are entitled to compensation totaling between 250 and 600 euros based on the flight distance and the delay’s length. However, airlines are not required to provide compensation if the cancellation was caused by “extraordinary circumstances.” “This is considered an extraordinary circumstance under most consumer travel regulations such as the European passenger law EC 261 and the international regulation Montreal Convention, and are situations in which travelers are not eligible for compensation,” Zillmer said, referring the Boeing 737 Max grounding. In European Union states, travelers would still be entitled to reimbursement for their airfare or re-routing, among other forms of relief, despite not receiving compensation. That’s not necessarily the case in the other countries that have grounded the aircraft. For instance, in the United States, there are no federal requirements for steps that airlines must take in such a situation. Also see:Stop falling for these 4 traps when booking flights Travel insurance won’t necessarily help you recoup any losses If a given country’s laws don’t protect air travelers, travel insurance may not be of much help either.<doc-sep>Rescuers work at the scene of an Ethiopian Airlines flight crash near Bishoftu, or Debre Zeit, south of Addis Ababa, Ethiopia, Monday, March 11, 2019. Photo : AP Multiple airlines around the world, along with the countries of China and Indonesia, have decided to ground Boeing 737 Max-8 planes in the wake of a crash on Sunday that killed 157 people. The crash of Ethiopian Airlines flight 302 was the second by a Boeing 737 Max-8 in the past five months. This past October, a Max-8 that was operated by Lion Air crashed off the coast of Indonesia and killed all 189 people on board. Advertisement As of early Monday morning, no major U.S.-based airlines have halted flights of their Max-8 aircraft. Cayman Airways and Ethiopian Airlines announced this morning that they would ground all Boeing 737 Max-8 planes shortly after China’s Civil Aviation Administration ordered all Chinese airlines to stop flying the Max-8. Boeing started delivering the new model to airlines this past summer and China already had 97 of the aircraft in operation, reports CNN. Ethiopian Airlines Flight 302 crashed shortly after takeoff on Sunday from Addis Ababa, the capital of Ethiopia, and was comprised of citizens from at least 35 countries, including eight Americans. Officials at Ethiopian Airlines are still trying to determine what caused yesterday’s crash; the plane’s black box was recovered today, though it’s reportedly damaged. “These kinds of things take time,” Kenya’s transport minister, James Macharia, who’s assisting with the investigation in Ethiopia, told the Associated Press this morning. Boeing’s 737 is the company’s most popular jet around the world, and U.S.-based airlines have not announced any plans to ground the newest model of the 737, the Max-8. Delta and United told Gizmodo they do not operate any Max-8 aircraft, although United Airlines said it currently has 14 of the Max-9 model in its fleet. American Airlines, which says it currently has 24 Boeing 737 Max-8 planes in operation, told Gizmodo over email that it has “full confidence in the aircraft and our crew members.” Advertisement “American Airlines extends our condolences to the families and friends of those on board Ethiopian Airlines flight 302. At this time there are no facts on the cause of the accident other than news reports,” a spokesperson from American’s media relations office told Gizmodo. Southwest told Gizmodo that it currently operates a fleet of 34 Max—8 aircraft and does not currently have plans to ground them. “Our heart goes out to the families and loved ones of the passengers and Employees on Ethiopian Airlines Flight 302,” a spokesperson said in an email, adding: “We remain confident in the safety and airworthiness of our fleet of more than 750 Boeing aircraft.” Advertisement Alaska Airlines has not yet responded to our request for comment. But the anecdotes emerging about both the crash of Lion Air Flight 610 and this weekend’s crash in Ethiopia are frighteningly similar. Both planes’ flight paths reportedly show the planes rising then descending then rising again before crashing, suggesting automated systems believed that the nose of the plane was too high. In that situation, the automation in the planes would push the nose of the aircraft down in an effort to keep it from stalling, even though it wasn’t in real danger of doing so. The pilots would then manually attempt to bring the nose back up, but there’s speculation that the pilots may have been unable to properly override the computers. Advertisement Australian TV media reported this morning that a Boeing software update would soon be sent to carriers, but Gizmodo could not independently verify that claim. Boeing provided this statement to Gizmodo: We have engaged our customers and regulators on concerns they may have - and would refer you to them to discuss their operations and decisions. Safety is our number one priority and we are taking every measure to fully understand all aspects of this accident, working closely with the investigating team and all regulatory authorities involved. The investigation is in its early stages, but at this point, based on the information available, we do not have any basis to issue new guidance to operators. [...] Boeing is deeply saddened to learn of the passing of the passengers and crew on Ethiopian Airlines Flight 302, a 737 MAX 8 airplane. We extend our heartfelt sympathies to the families and loved ones of the passengers and crew on board and stand ready to support the Ethiopian Airlines team. A Boeing technical team will be travelling to the crash site to provide technical assistance under the direction of the Ethiopia Accident Investigation Bureau and U.S. National Transportation Safety Board. Advertisement Other airlines around the world, including Singapore Airlines, are taking a wait-and-see approach to the Max-8 aircraft in its fleet. As the Daily Beast notes, there is no other model of airplane in recent history that has had two major crashes so soon after delivery. American-based carriers are waiting to potentially ground any of their Max-8 aircraft as well, by broadly gesturing at the fact that they haven’t received any warnings to do so. Advertisement “We continue to work closely with Boeing, FAA and NTSB. We have not made any changes to our current flight schedule,” a spokesperson for American told Gizmodo over email. Boeing is in for a rough week ahead, as the Wall Street Journal notes that 5,526 of the Max-8 were on order and yet to be delivered to airlines around the world. Shares in Boeing are down over 10 percent in premarket trading. Advertisement Update 9:25am: Added comment from Southwest. Update 10:52am: Added comment from Boeing. Update, March 13: Updated to remove a reference to JetBlue, which does not have any of the Max-8 in its fleet. Advertisement [Associated Press and CNN and Daily Beast]<doc-sep>Stephen Brashear/Getty Images US airline stocks traded lower Tuesday morning as Boeing's 737 Max was continued. The major airlines with exposure the to aircraft were all down at least The pressure on the sector increased as six governments and more than 23 airlines grounded the aircraft. Delta, which does not have exposure to the aircraft, was outperforming. US airlines stocks traded lower Tuesday as safety concerns surrounding the Boeing 737 Max grew louder on Tuesday as Britain joined China, Indonesia, Australia and Singapore in grounding the planes. American Airlines, United Continental, and Southwest were all down more than 2% in Tuesday morning trading. Here's a look at the scoreboard as of 11:35 a.m. ET. Southwest Airlines (LUV): -2.34% -2.34% American Airlines (AAL): -2.25% -2.25% United Continental (UAL): - 2.48% 2.48% Delta Airlines (DAL): -0.41% Southwest operates 31 of the aircraft, while American Airlines and United Airlines operate 20 and 12, respectively. Southwest has the highest exposure by airline seat miles while Delta does not operate the aircraft. Business Insider As of Tuesday morning, the Federal Aviation Administration had not yet grounded the aircraft despite increasing pressure to do so. Senator Mitt Romney tweeted, "Out of an abundance of caution for the flying public, the @FAANews should ground the 737 MAX 8 until we investigate the causes of recent crashes and ensure the plane's airworthiness." Outside the US, carriers with exposure to the 737 Max are increasingly grounding the plane until further notice. Over 23 carriers have now grounded the aircraft. NOW WATCH: Amazon will pay $0 in federal taxes this year — here's how the $793 billion company gets away with it<doc-sep>
The Trump administration's decision to ground a type of Boeing jet involved in two crashes could affect people flying in and out of Detroit Metro Airport. Several airlines that fly the Boeing 737 Max 8, including United, American and Southwest, also service Detroit Metro. Delta Air Lines, Detroit's main carrier, does not fly the jet. The grounding affects both the Max 8 and Max 9. The Free Press reached out to numerous airlines that use the grounded jet and service Detroit Metro to check on the local impact. Most referenced general company statements. Southwest Airlines Southwest's website said that its 34 now-grounded Max 8 planes account for less than 5 percent of its daily flights. "Our goal is to operate our schedule with every available aircraft in our fleet to meet our customers' expectations during the busy spring travel season," the company website said. It noted that "any customer booked on a canceled Max 8 flight can rebook on alternate flights without any additional fees or fare differences within 14 days of their original date of travel between the original city pairs. A travel advisory with additional information for customers will be posted on Southwest.com." The company said in its statement that it remains confident in the jet, but also said it is abiding by the government's decision. More:Detroit Metro Airport saw more than 35 million passengers in 2018 More:Nonstop flights from Detroit to Hawaii to begin in 2019 United Airlines United also said it is working to minimize the impact on its customers. "Our Max aircraft account for roughly 40 flights a day, and through a combination of spare aircraft and rebooking customers, we do not anticipate a significant operational impact as a result of this order. We will continue to work with our customers to help minimize any disruption to their travel," United spokesman Jonathan Guerin said, noting that the airline has 14 737 Max aircraft. American Airlines American said it has 24 planes affected by the grounding. “Our team will work with all customers impacted by these flight cancellations in order to rebook them to their final destination. Affected customers may rebook themselves on aa.com by retrieving their reservation or using our mobile app. If a flight is canceled, customers may request a full refund by visiting our website. Customers who booked through a travel agent are requested to contact their agency directly,” according to the American Airlines statement. Aeromexico posted a statement saying it is temporarily suspending operation of its six Boeing 737 Max 8 jets. In an email to the Free Press, spokesman Emilio Diaz said "Aeromexico does not operate the 737 MAX 8 fleet to DTW, it consists of Embraer 190 and a mix of Boeing 737-800 or 700." Immediate impact The air traffic tracking site FlightAware.com on Wednesday afternoon listed 68 delays and 33 cancellations for all flights at Detroit Metro. Flightstats.com showed the delay status Wednesday afternoon at Detroit Metro, which is known by the abbreviation DTW, as low and increasing. The grounding order Wednesday followed a string of similar decisions by countries across the globe in response to a deadly Ethiopian Airlines crash this weekend and a Lion Air crash off the coast of Indonesia in October. Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence.