Report of Air Force One Incident Wallops Boeing Stock

BA stock - Report of Air Force One Incident Wallops Boeing Stock

Source: Marco Menezes /

Boeing (NYSE:BA) stock is sinking and underperforming the major stock markets after The Wall Street Journal reported that the company had encountered a potential problem while working on an Air Force One jet. Air Force One jets are used by the U.S. federal government to transport Presidents of the United States.

According to The Journal, after Boeing’s employees transferred the plane to jacks, concerns were raised about a number of the jacks holding more weight than they were supposed to. As a result, there were worries that the jet’s wing was damaged. The Air Force ultimately reported that the plane was not damaged, but a review found that the company had not followed proper “procedures” in the time leading up to the incident, the newspaper stated.

In recent years, the plane maker has had multiple, major problems with its commercial aircraft. For example, regulators refused to allow the 737 MAX to fly for nearly 24 months after two of the planes crashed, and the rollout of its 787 Dreamliner has been delayed.

However, it’s not all doom and gloom for Boeing. After all, Boeing is one of only two major airplane makers in the developed world (Airbus (OTCMKTS:EADSY) is the other). And it’s the only major company of its type in the U.S.

Moreover, Boeing employs thousands of Americans and has a long history of working with the Defense Department. As a result, the Pentagon will, in all likelihood, not take contracts away from the company.

Ultimately, Boeing is not at serious risk of losing a high number of its commercial airplane deals. And with the demand for air travel rising as fears about Covid-19 ease, BA stock is well-positioned to rally in the coming months.

That said, the company does seem prone to problems. And a number of those issues have cost the company large amounts of money and have weighed meaningfully on Boeing’s shares. Therefore, investors, particularly those with low risk tolerance, may be better off buying other travel stocks to benefit from the winding down of the pandemic.

Among the names that could fit the bill are, as I pointed out in a recent column, Expedia (NASDAQ:EXPE), MGM Resorts (NYSE:MGM), Marriott (NASDAQ:MAR) and the Invesco Dynamic Leisure and Entertainment ETF (NYSEARCA:PEJ).

On the date of publication, Larry Ramer held a long position in MGM. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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