Boeing Co. (BA) shares extended declines Monday, while its European rival Airbus SE (EADSY) soared to an all-time high, as investors reacted to news that American Airlines (AAL) has extended cancellations of the grounded 737 MAX for a fourth time, taking the troubled aircraft out of commission until at least November.
The biggest U.S. carrier said it would extend its 115 daily cancellations of the grounded 737 MAX until November 2, two months longer than its previous forecast, following similar moves by rivals such as Southwest Airlines (LUV) and United Airlines (UAL) . American has 24 737 MAX aircraft in its fleet, the second-largest in the U.S. market behind Southwest. A Wall Street Journal report from Sunday, meanwhile, suggested the 737 MAX groundings could stretch into early next year.
"American Airlines remains confident that impending software updates to the Boeing 737 MAX, along with the new training elements Boeing is developing in coordination with our union partners, will lead to recertification of the aircraft this year," American said in a weekend statement.
Airbus shares were marked 1.32% higher in the opening hour of trading in Paris to change hands at a record high €129.36 following news of the American Airlines cancellations, the fourth such move from the carrier this year, while Boeing shares slipped 1.5% lower in New York to $360.35 each.
With Monday's pre-market move, Boeing shares have fallen around 3.6% over the past three weeks, compared to a 3% gain for the Dow Jones Industrial Average, after the U.S. Federal Aviation Administration said it found yet another issue with the planemaker's 737 MAX software that could further delay its return to service.
The FAA also said the testing and procedures were following a process, not a prescribed timeline, for the 737 MAX's recertification, while the International Air Transport Association called for additional training requirements for crews flying the 737 MAX.
U.S. carrier United Airlines, meanwhile, said t will pull all MAX aircraft from its summer schedule, resulting in around 3,200 cancellations over July and August, and doesn't expect Boeing's flagship plane to return until at least September 3, echoing a similar assessment earlier this month from Southwest Airlines.
The planemaker's grim output figures, which showed a 37% slump in deliveries over the fist half of this year to just 239 aircraft, well behind the 389 planes shifted by European rival Airbus, have added downward pressure on the shares.
"We have said all along that the regulatory authorities determine the process for certifying the MAX software and training updates and the timing for lifting the grounding order," Boeing said in a statement to TheStreet on Sunday, adding it would not comment on "media speculation on that schedule."
"We deeply regret the impact the 737 MAX grounding is having on our customers and their passengers," said Boeing. "Boeing is working very closely with the FAA on the process they have laid out to certify the 737 MAX software update and safely return the MAX to service. The disciplined development and testing work underway is based on a rigorous analysis by our technical experts of the FAA requirements."
"We will submit the final software package to the FAA once we have satisfied all of their certification requirements," the company added.