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Boeing’s troubles and a development in e-cigarettes

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Boeing’s troubles are getting

Boeing’s troubles are getting worse following the terrible Ethiopian air crash on the weekend.

The US Federal Aviation Administration has now grounded all Boeing 737 MAX jets and is banning them from US airspace as investigations continue to take place about the cause of the accident.

The UK, Australia and Canada were among those who had already taken this action but the Americans followed suit when new data came to light which showed that the failure shared similarities with another recent crash involving the same model.

The 737 MAX is Boeing’s most popular plane, so the company is trying to find the root cause as quickly as it can so that it can make the necessary adjustments and reassure the flying public.

It’s unclear at the moment about how this might affect the current order book and whether Airbus will benefit from a switch to its planes, but the fact is that it takes a long time to manufacture aircraft so the sooner Boeing finds the problem, the less of an impact there’ll be.

Clearly, damage to the company is way less than that to the individuals and families affected by the crash.

 A development in e-cigarettes

I also wanted to mention a development in e-cigarettes in the US. Basically, Scott Gottlieb, the FDA’s chief who will be leaving office in the next few weeks, has been a vocal advocate AGAINST e-cigarettes in the US.

He has now implemented a ban on convenience stores and petrol stations from selling most flavours of e-cigarettes and will potentially roll out other directives that initially came to light in November.

He said that if underage vaping continues to increase, the FDA would consider an outright ban on all pod-based vaporisers.

This is obviously bad for Juul which currently has a massive 73% market share of the US market, but all tobacco companies who have exposure to e-cigarettes will be keen to see whether Gottlieb’s successor shares his zeal when it comes to e-cigarettes and menthol ones.

A concerted clampdown by the FDA could give other regulators around the world the excuse to make life difficult for tobacco companies.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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