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03-11-2019, 10:46 PM
(This post was last modified: 03-11-2019, 10:48 PM by fenders53.)
Any thoughts on Boeing? I've always considered them a premiere company I never invested in. I believe I will when there is a little more clarity. The bigger issue is ensuring aviation safety for the world. My initial thoughts are...
1. Two nearly new planes falling out of the sky is more than a little alarming with the minimal information we all currently have. There have been virtually no fatal failures for a decade from Boeing or Airbus before this.
2. I don't blame the FAA for not jumping to conclusions, nor do I blame countries for grounding 737 fleets temporarily until some facts come out.
3. Waiting a year for a formal investigation to conclude is just not going to work this time. BA needs to do some quick investigating and make the best initial decision, for the business, and humanity. It's in fact a duopoly. BA is not going away no matter what. Grounding the fleet briefly might send the stock to $200 for awhile. IMO they would survive that just fine.
4. My initial reaction was these are third world countries crashing planes. Yeah, upon further review these same countries have not been crashing Boeing planes so that is probably just my proud American arrogance reaction. The minimal drop in BA stock price today says this is no big deal. But I remain skeptical for now.
I truly have much respect for BA. They will be judged for decades on the way they handle this. That I know with some certainty.
crimsonghost747
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First of all, virtually no fatal failures for a decade is not true. Excluding these two recent ones, we still have many many cases where accidents have resulted in fatalities. Just from the wikipedia list I can find 3 other fatal accidents related to malfunctions in 2018 alone. All of them Boeing actually. These things happen. There are fatal accidents pretty much every year, sometimes it's the plane, sometimes the pilot, sometimes both. Right now, we don't even know what happened with this most recent one.
As for number 4. Actually I believe you are more or less right, it is often these dodgy airlines that have these accidents. With Lion air there had been maintenance issues. Having flown this Air Ethiopia thing before, I can attest to the fact that it is the absolutely worst airline I've used ever in my life. And I fly a lot.
In general the quality of personnel, both the engineers keeping the planes in good conditions and the pilots flying them, is poor in some of these countries when compared with western standards. Now whether or not these things contributed to the latest crash, who knows. But I certainly wouldn't rule it out.
Investment point of view... I wouldn't touch Boeing right now. Not because of these two crashes but due to the fact that even after yesterday's decline the stock price is still way too high. It went down to $300 in December and now it's still at over $400 after yesterday's drop.
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03-12-2019, 02:35 AM
(This post was last modified: 03-12-2019, 02:41 AM by fenders53.)
I did some looking around and didn't find any major passenger airliner crashes this decade. Which do you refer to? Country, airline and aircraft? I just don't remember them. I didn't count the Malaysian incident due to the circumstances. In any event, this is not AT ALL normal to my recollection. I am hopeful the two accidents are not actually that similar when the facts come out. For now it sounds bad.
And yes BA is expensive. I thought surely it was headed for $350 for now. BA earnings estimates are strong though.
crimsonghost747
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(03-12-2019, 02:35 AM)fenders53 Wrote: I did some looking around and didn't find any major passenger airliner crashes this decade. Which do you refer to? Country, airline and aircraft? I just don't remember them. I didn't count the Malaysian incident due to the circumstances. In any event, this is not AT ALL normal to my recollection. I am hopeful the two accidents are not actually that similar when the facts come out. For now it sounds bad.
There is a pretty decent list here
https://en.wikipedia.org/wiki/List_of_ac...craft#2018
Of course some are pilot errors, some are malfunctions and some are both. But the point is that accidents do happen quite regularly.
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It is still over-priced. My last BA purchase was at about $120. Below $300 puts it at a forward P/E (year-end 2019) of 15, based on current estimates (which could obviously change if the 737 MAX 8/9/10 have a design flaw that requires serious redesign/recertification). My interest in buying more will be piqued if it drops back under $300.
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03-12-2019, 08:17 AM
(This post was last modified: 03-12-2019, 08:18 AM by fenders53.)
(03-12-2019, 04:45 AM)crimsonghost747 Wrote: (03-12-2019, 02:35 AM)fenders53 Wrote: I did some looking around and didn't find any major passenger airliner crashes this decade. Which do you refer to? Country, airline and aircraft? I just don't remember them. I didn't count the Malaysian incident due to the circumstances. In any event, this is not AT ALL normal to my recollection. I am hopeful the two accidents are not actually that similar when the facts come out. For now it sounds bad.
There is a pretty decent list here
https://en.wikipedia.org/wiki/List_of_ac...craft#2018
Of course some are pilot errors, some are malfunctions and some are both. But the point is that accidents do happen quite regularly.
You are correct. There are some on the list that certainly qualify as large passenger airline fatal accidents. It's rare when they pin it down to a failed aircraft that was regularly maintained.
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(03-12-2019, 08:17 AM)fenders53 Wrote: (03-12-2019, 04:45 AM)crimsonghost747 Wrote: (03-12-2019, 02:35 AM)fenders53 Wrote: I did some looking around and didn't find any major passenger airliner crashes this decade. Which do you refer to? Country, airline and aircraft? I just don't remember them. I didn't count the Malaysian incident due to the circumstances. In any event, this is not AT ALL normal to my recollection. I am hopeful the two accidents are not actually that similar when the facts come out. For now it sounds bad.
There is a pretty decent list here
https://en.wikipedia.org/wiki/List_of_ac...craft#2018
Of course some are pilot errors, some are malfunctions and some are both. But the point is that accidents do happen quite regularly.
You are correct. There are some on the list that certainly qualify as large passenger airline fatal accidents. It's rare when they pin it down to a failed aircraft that was regularly maintained.
80+% of all aviation accidents are attributed, at least in part, to pilot error. That said, in the modern era, flying on a commercial aircraft just about anywhere in the world is statistically safer than driving to work in the morning.
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[quote pid='16623' dateline='1552396938']
80+% of all aviation accidents are attributed, at least in part, to pilot error. That said, in the modern era, flying on a commercial aircraft just about anywhere in the world is statistically safer than driving to work in the morning.
[/quote]
I would say it's not even close. There are countries in this world where human life is taken less seriously, but the cost of a crash is devastating to an airlines finances. I'd be more concerned with terrorism, or being shot down by somebody's air force. It's about statistically impossible to be shot down by a Russian MIG, but it happened. Or how about a nut job pilot driving off until running out of fuel with a full load of passengers? It's not Boeing engineering I worry about. I do however want them to handle this perfectly with little regard to cost.
I did read that BA is fielding new MCAS software in April. To me, that seems responsive to make a correction about 6 months after a crash. They don't have a year or two to investigate, and contemplate whether there is an actual design flaw design flaw. They can make things safer now, and debate whether it was already safe enough, at a later date.
crimsonghost747
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A little new info.
Several airlines and countries have grounded the aircraft in question.
Possibly the biggest: EU is considering a temporary grounding order. More info on that later tonight.
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China, and an airline or two did that at least a day ago. Erring on the side of caution seems prudent. Boeing and the FAA have been studying the Lion Air crash for 5 months. They now have the flight recorder for the current accident. It's time to work long hours and earn that pay. They can connect the dots well enough in the near future.
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Accidents happen and BA will work through this and most likely for the better.
Personally, I don't think it's overpriced even at 375
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All MAX aircraft now grounded in the U.S., as well.
For Boeing to trade at the same P/E multiple that it did in 2013, when investors were concerned about 787 battery issues, 787 program cost overruns, and an SEC accounting investigation, the stock price would need to drop to about $275. Current P/E is still well above its 10-year average of 18.1, and 10yr average operating earnings growth rate of 17.4%
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