China and Indonesia ground Boeing 737 Max 8 jets after Ethiopia crash

Boeing shares are plummeting by 12% in pre-market trading after China and Indonesia decided to ground their 737 Max 8 jets made by the American aerospace giant in the wake of a catastrophic Ethiopian Airlines crash at the weekend that killed all 157 people on board.

In the second deadly incident inside of just five months involving Boeing's best-selling jet, on Sunday a Boeing 737 Max 8 flown by Ethiopian Airlines crashed while on its way to Nairobi from Addis Ababa, killing all on board, leading the carrier to ground the rest of its 737 Max 8 fleet until further notice.

“Although we don’t yet know the cause of the accident, we have to decide to ground the particular fleet as an extra safety precaution,” the carrier said in a statement.

Investigators had already located the aircraft's 'black box' but the reason for the crash was not yet known.

Breaking with traditional air-safety practices, officials in China mimicked the move, instructing its carriers to ground all Boeing jets of the same make, followed by Indonesia and Cayman Airways soon afterwards.

China's civil aviation administration reportedly adopted that measure due to the similarities between Sunday's crash - which occurred shortly after takeoff - and that in Indonesia five months ago, when a Lion Air jet fell into the sea 13 minutes after takeoff, killing all 189 people on board.

Typically, regulators wait for the decision from their peers in the country where the aircraft had been certified before taking such action.

For his part, Cayman Airways boss, Fabian Whorms said the airline had to “put the safety of our passengers and crew first.”

Over 300 Boeing 737-MAX planes were currently operational and orders had been placed for another 5,000, mostly of the MAX 8 variant.

Also on Sunday, Boeing said it would cancel an event scheduled for Wednesday in Seattle to showcase its new 777X airliner.

Some analysts cautioned it was too soon to draw any links between the two crashes, although for others the similarities were "hard to ignore".

One broker called attention to the Manouevring Characteristics Augmentation System, which kicks-in once the wing flaps used at takeoff are retracted, and which was introduced with the 737 MAX as a safety feature, as a possible link common denominator in the two crashes.

The MCAS software takes control of the aircraft automatically under certain situations in order, for example, to keep the engines from stalling, by pushing the nose of the aircraft downwards.

According to some reports, the Lion Air crash was the result of a combination of factors, including a faulty angle-of-attack sensor interacting with the MCAS and the pilots' decision, perhaps due to insufficient training, not to manually override and turn-off the MCAS.