Yevgeny Prigozhin, head of the private military contractor Wagner Group, was listed as a passenger on an
Embraer
jet that crashed in Russia Wednesday, but investors don’t seem to be concerned about the safety of the plane.
The jet was an Embraer (ticker: ERJ). Legacy 600, but the incident isn’t affecting Embraer’s U.S.-listed American depositary receipts, or ADRs. They rose 3% in Wednesday trading, while the
S&P 500
and
Nasdaq Composite
rose 1.1% and 1.6%, respectively.
The reaction, or lack of reaction, shows that investors don’t attribute the cause to an issue with the plane. Social-media channels close to Wagner said Russian air defenses shot down the jet, The Wall Street Journal reported. Images of debris published by Russian media appeared to have holes like those created by air-defense missiles, the newspaper said.
Russian aviation regulators cited by state media didn’t provide a reason for the crash, while some Russian lawmakers said the cause could have been a bomb on board, the Journal said. The government said it is investigating, it reported.
Investors typically react with a little more caution to major incidents.
Boeing
(BA) stock dropped 6.6% after an Oct. 29, 2018, crash of a 737 MAX jet and 5.3% after a March 10, 2019 MAX crash.
Fortunately, typical isn’t a word that best describes crashes.
Boeing
data show that there is roughly one accident resulting in fatalities every five million flights.
Airbus
(AIR.France) data show that for the newest planes, a hull loss, essentially the destruction of the plane, occurs roughly once every 6.3 million flights.
Figures for business jets, rather than commercial planes, are reported differently. The National Business Aviation Association reports safety statistics per 100,000 flight hours. Recent data show there is one fatality per 400,000 to 500,000 flight hours.
Embraer didn’t immediately respond to a request for data about the Legacy 600 and its safety.
Numbers like that are an abstraction. Practically speaking, the average person would have to fly for thousands of years before they could reasonably expect to be involved in an airplane accident.
Investors will learn more about the Legacy 600 crash in the coming days. The details aren’t likely to affect shares of jet makers.
Through Wednesday trading, Embraer ADRs were up 46% so far this year. Investor sentiment about commercial aviation-related stocks is improving as air- travel statistics surpass prepandemic levels. In May, global domestic travel, or travel within various countries, was 5.3% above May 2019 levels. International travel was running at about 91% of pre-Covid levels.
Write to Al Root at [email protected]
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