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Boeing Stock (NYSE:BA) Surges as Fuel Control Switches Considered in Air India Disaster

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New developments in the Air India crash focus on fuel switches, while Boeing pulls back from a bidding process in South Korea.

Boeing Stock (NYSE:BA) Surges as Fuel Control Switches Considered in Air India Disaster

The catastrophic crash of a recent Air India flight, featuring a 787 Dreamliner from aerospace stock Boeing (BA), has prompted deep concern over whether or not the problems that plagued the 737 Max are spreading. But a new report emerged that suggested that may not be so after all. Boeing investors, meanwhile, sent a likely joy-fueled surge through Boeing’s coffers, and sent its share price up nearly 5% in Wednesday afternoon’s trading.

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Reports from the Economic Times of India noted that investigators are looking into a new angle: whether or not fuel control switches in the aircraft had been moved ahead of the aircraft’s crash. The move may have been accidental, or it may have been deliberate. But the reports noted that “…the position and movement of the engine fuel switches…” is of particular interest right now, based on a combination of factors. This combination includes flight data, voice recordings, and a set of simulations that Boeing itself conducted to aid the investigation.

A preliminary report is expected by Friday, the report noted, but one report from aviation safety expert John Cox said that an “accidental movement” would be rather difficult to pull off. The controls are apparently protected against most accidents, and are not sufficiently sensitive to move with mere jostling. But shutting off one of these switches would cause what the report called “…an almost immediate loss of power.” This again meshes well with earlier reports about the aircraft’s Ram Air Turbine (RAT) deploying.

Ditching the Contest

Meanwhile, Boeing also stepped back from an airborne early warning (AEW) competition being held in South Korea. Boeing reportedly did not submit a bid for the E-X Phase II program’s third round of its tender process.

The biggest problem, reports noted, was a matter of pricing. Boeing’s entrant into that contest, the E-7A, has recently increased in price. Thus, Boeing believed it could no longer provide the aircraft for what the South Korean government budgeted for the task. Boeing may have a chance to get back in later, assuming the rest of the competition—Saab (SAABF) and L3Harris (LHX)—has their proposals rejected as well.

Is Boeing a Good Stock to Buy Right Now?

Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 18 Buys, two Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 18.94% rally in its share price over the past year, the average BA price target of $227.85 per share implies 0.26% upside potential.

See more BA analyst ratings

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