China Eastern Airlines crash heaps pressure on aviation sector already struggling under weight of pandemic

The crash of flight MU5735 piles on the woes for an industry that’s still struggling with US$31 billion of losses from a pandemic-led slump

Scrutiny of airlines’ safety controls – already among the strictest in the world – is certain to increase, bringing additional costs for carriers

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China Eastern has grounded all its 737-800 flights. Photo: Bloomberg

Published: 5:38pm, 22 Mar 2022Updated: 10:30am, 23 Mar 2022

The crash of a China Eastern Airlines flight on Monday piles on the woes for an industry that’s still struggling with 200 billion yuan (US$31.4 billion) of losses from a pandemic-led slump.

Rescue efforts for the 132 passengers and crew aboard flight MU5735 were ongoing in the city of Wuzhou in Guangxi province on Tuesday, as President Xi Jinping demanded an all-out search for survivors and an investigation into safety issues in the civil aviation industry.

The accident sent ripples through financial markets on Tuesday. China Eastern shed 6.2 per cent in Shanghai and 2.6 per cent in Hong Kong. A gauge tracking major Chinese airlines compiled by financial data provider Wind Information fell 1.5 per cent.

Boeing, the manufacturer of the seven-year-old 737-800 aircraft that crashed, fell 3.6 per cent in New York overnight.

China Eastern has grounded all its 737-800 flights. An investigation into the cause of the crash was ongoing, the carrier said in a statement on Monday.

The incident comes as China’s aviation industry is already struggling under the weight of a resurgence of Covid-19.