How a Solar Flare Grounded Airbus Planes—and Knocked Down Its Stock

JetBlue employees work around an Airbus A320 passenger aircraft at JFK International Airport in New York. (AFP via Getty Images)

Key Points

• Airbus stock fell in overseas trading due to issues with flight controls on thousands of jets.
• Airbus announced a “precautionary fleet action” for affected A320-family jets, and a safety warning was issued from European aviation regulators.
• Less than 100 Airbus planes still require modifications. Despite the limited impact, investors have reacted nervously.

Airbus stock fell Monday as the jet maker worked to fix flight controls on thousands of jets that could be impacted by solar flares.

Shares of the European jet maker traded as low as €182.38 before closing at €192.58, down 5.8% in overseas trading on Monday. Shares of rival Boeing lost 1.3%, while the S&P 500 and Dow Jones Industrial Average fell 0.5% and 0.9%, respectively.

On Friday, Airbus announced a “precautionary fleet action” for affected A320-family jets, which was accompanied by a safety warning from European aviation regulators.

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Some 6,000 jets were affected. There are more than 11,000 A319, A320, and A321 model jets in operation worldwide, according to Airbus. “A massive recall caused by cosmic radiation,” is how Deutsche Bank analyst Christophe Menard characterized the event. “The financial impact for Airbus is still being assessed. Positive aspects of this event include the rapid industry response and Airbus’s prioritisation of safety.”

On Oct. 30, JetBlue flight 1230 “experienced an uncommanded and limited pitch down event. The autopilot remained engaged throughout the event, with a brief and limited loss of altitude, and
the rest of the flight was uneventful,” reads the emergency airworthiness directive from the European Union Aviation Safety Agency, or ESAS. “Preliminary technical assessment done by Airbus identified a malfunction of the affected ELAC as possible contributing factor.”

ELAC is short for Elevator Aileron Computer. The affected ELACs were to be replaced or modified before their next flight, following the directive.

Thales makes the ELAC, added Menard. He said the firm wasn’t responsible for the software at the heart of the problem. Thales’ stock lost 2.6% on Monday.

“Analysis of a recent [JetBlue] event involving an A320 Family aircraft has revealed that intense solar radiation may corrupt data critical to the functioning of flight controls,” Airbus said on Friday.

On Monday, Airbus added that out of about 6,000 aircraft potentially impacted, the vast majority have received the necessary modifications.

Less than 100 planes remain to be modified. Despite the limited impact on service, investors have reacted to the news nervously. They appear to be taking a wait-and-see approach. They are highly attuned to any software issues after faulty flight control software was partly responsible for two deadly 737 MAX crashes in 2018 and 2019. No accidents have been reported as a result of solar radiation’s impacts on A320 jets.

Coming into Monday trading, Airbus stock was up 19% this year and up 25% over the past 12 months. Higher demand for commercial jets has boosted investor sentiment. The biggest challenge for Airbus, before this recent problem, was building enough jets.

Vertical Research Partners analyst Rob Stallard also pointed out on Monday that Airbus production rates could be impacted by production quality issues related to A320 issues. That could also impact shares.

Airbus didn’t respond to a request for comment about the manufacturing quality issue.

Write to Al Root at allen.root@dowjones.com