Barclays lowered its rating of Boeing (NYSE:BA) shares to equal weight from overweight on Tuesday as the firm’s survey of airline passengers says many people will avoid the 737 Max “for an extended period” once the aircraft is flying again.
"In order to gauge perception of the 737 MAX, we surveyed 1,765 fliers in N America and Europe, reflecting a broad mix of age groups, income levels and frequency of airline travel," Barclays said in a note to investors.
Monday, the company admitted that it made an alarm feature “optional” instead of “standard” on its fleet of Max 737 jets. This feature, known as the Angle of Attack (AOA) Disagree alert, was designed to let pilots know when two different sensors were reporting conflicting data.
Boeing insists that only when deliveries began did it realize the feature was only available if airlines purchased the optional indicator. The jet-maker went on to say that its intention was to deal with the problem in a software update.
And while the company maintains that this feature did not jeopardize the safety of the plane, it is widely understood to be a major factor in the two fatal crashes that led to the grounding of Boeing’s entire fleet of Max 737s.
Barclays lowered its price target on Boeing’s stock to $367 a share from $417 a share.
Boeing shares were punished $6.70, or 1.8%, in early Tuesday trading to $365.26.
