Shares of Boeing (BA) were under pressure Monday — falling as much as 6.5% — after the crash of one of the aircraft maker’s commercial jets in China.

First, it’s important to acknowledge the horrible news. A Boeing 737-800NG (next generation) plane operated by China Eastern Airlines with 132 people on board plunged mid-flight and crashed into a mountainous area of southern China. There were no survivors. The black box has been recovered, along with remains of the aircraft, and an investigation is under way.

As human beings, our thoughts are with the victims and their families. As an investor in Boeing, we are looking at the risk this particular tragedy might pose to the stock.

First of all, it’s worth noting that the Boeing jet that crashed in China on Monday was a 737 NG, not a 737 Max. The 737 Max was grounded worldwide in March 2019 following two deadly crashes that turned out to be Boeing's fault. After months and months of investigations and then regulator-mandated changes, the Max jets resumed flights in the U.S. in December 2020. Because of this systematic issue with the 737 Max, Boeing shares have lost more than 50% in the past few years, as the company has been working to restore its reputation and to rebuild after the Covid pandemic-related slowdown in airline travel.

What we know (as of this writing)

• On Monday, China’s civil aviation authority said a China Eastern Airlines flight crashed in the mountainous Guangxi region.

• The plane, which was a Boeing 737-800 NG, carried 123 passengers and nine crew members.

• Data suggests the plane went down quickly, plunging over 25,000 feet over roughly two minutes. In the middle of that rough descent, there was a moment when the plane levelled off a little bit, but then continued to plunge.

• The Boeing 737-800 NG does not have the Maneuvering Characteristics Augmentation System (MCAS) software issues that played a crucial role in the 737 Max crashes.

• The Boeing 737-800 is a very common aircraft around the world, especially in China.

• According to The Associated Press, Boeing delivered the plane involved in Monday’s crash in June 2015, and it had been in use for over six years.

• All 737-800s in China Eastern’s fleet are being grounded, according to the AP.

More information on the crash will surely surface in the coming hours and days. But the actual cause of the crash is not yet known. Getting to the bottom of what happened is likely to take time.

What it means for BA stock

This has been a frustrating stock to own. One of our investment theses in the stock is the 737 Max returning to service in China. Back in December, China’s regulator issued an important safety directive for the 737 Max, telling airlines to make changes necessary for the plane to fly again. That was a good sign. Then last week, Reuters reported that a 737 Max jet was headed for the company’s completion plant in China. We saw this report as positive news.

This brings us to a key question in light of Monday’s crash: How does it affect China’s plan to start flying the 737 Max again?

These are two different models of aircraft, with the 737-800 NG being an older model. But Boeing is the manufacturer in both, and it’s just hard to say whether this crash will change the Chinese authorities' stance on the 737 Max.

Bottom line

The 737 Max returning to Chinese skies has been an important upside catalyst for Boeing's stock. This accident complicates such return. That's why we are siting tight on our Boeing holding for now. Management must be up to the task of executing through this latest challenge.