Boeing shares plummet due to Dreamliner crash in India. What is being said on Wall Street?

Updated: the article originally reported that more than 290 people died in the crash of the Dreamliner. Indian police later clarified that some body fragments at the crash site had been counted twice. According to the latest figures, at least 241 people on board died. 

Shares of aerospace corporation Boeing collapsed nearly 6% after the Dreamliner crashed in India, killing more than 240 people, according to the latest data. It is the first crash of that model in its entire lifetime. The cause is not yet known, and analysts are calling investors' reaction emotional. At the same time, they warn that Boeing quotes will remain under pressure due to uncertainty;

Shares of Boeing fell by 5.9% in trading on June 12. This is the largest drop since April 4, when quotations collapsed by 9.5% during the day, notes MarketWatch.

Earlier on Thursday, a Boeing 787-8 Dreamliner belonging to Air India and bound for London crashed shortly after takeoff in the Indian city of Ahmedabad. The plane crashed into a medical college dormitory. According to last reports, 241 of 242 passengers and crew members and people on the ground were killed. 

As long as the cause of the airplane crash is unknown, the sell-off in the stock could be called an instinctive reaction by investors, said IG Group analyst Chris Beauchamp. «It's an emotional reaction to the incident,» he said. - Concerns about the problems that have plagued both Boeing's airplanes and the company itself in recent years are resurfacing.»

Aviation expert and president of Boyd Group International Mike Boyd cautioned against jumping to conclusions about the cause of the crash. «This is not a new airplane. Air India has a very good safety record,» he said in an interview with CNBC's Squawk Box program. Boyd added that investors should not assume this is «another incident like the Boeing Max.»

The Boeing 737 MAX was taken off the air for more than a year after two crashes linked to problems in flight control software.

It's too early to say what caused the incident in India, but the mere fact of the first Dreamliner crash is troubling, according to Saxo investment strategist Neil Wilson. «This incident could undermine recent progress in restoring investor and public confidence [in Boeing],» he told MarketWatch.

«It's too early to know the cause of what happened, but based on the age and operating history of the airplane, it's unlikely to be a manufacturing defect or design error. The stock is likely to be under pressure until we know more,» Citi analyst Jason Gerski wrote in a note to clients that цитирует Bloomberg. He noted that the crashed plane had been operated by Air India for 11 years and was used extensively on long-haul routes.

The Air India crash is the first crash for the Dreamliner, which began commercial flights in 2011, according to the Aviation Safety Network database. The crashed plane made its maiden flight in 2013 and was handed over to Air India in early 2014, according to Flightradar24.

According to data from Bloomberg, the plane was produced shortly after the launch of the 787 program, when Boeing was facing the fallout from a decision to outsource much of its design and engineering work to third-party contractors in an effort to cut costs. As part of the Dreamliner program, the jetliner had a factory number of 26 - meaning it was among the first 60 planes that were subsequently heavily modified after leaving Boeing's factory.

Assembly of the plane for Air India began in August 2010, according to All Things 787, a blog that tracked Boeing's production at the time. The plane was not delivered to the airline until more than three years later, a typical timeframe for early Dreamliners that required extensive modernization, Bloomberg notes.

The Dreamliner remains extremely popular with airlines, but there were problems with it early in its operation. Less than two years after its introduction to the market, Boeing was forced to suspend operations of its entire Dreamliner fleet to test its lithium-based batteries - there was a risk of them overheating and catching fire, reminds Bloomberg. 

The crash, in which most of those on board died, casts a shadow over the safety of the airplane that Boeing will unveil at the Paris Air Show next week. The tragedy casts doubt on CEO Kelly Ortberg's efforts to speed up production, Reuters notes.

Boeing has just begun to regain the confidence of customers and investors: the company recently received a number of large orders. In addition, improved trade relations have led to the lifting of China's short-term ban on Boeing aircraft purchases, MarketWatch recalls.