What happened

Shares of Boeing (BA 0.44%) are slumping today, down by 2.3% as of 11:20 a.m. The plane manufacturer was the subject of a cautious note issued by an analyst yesterday, apparently raising concerns among investors.

So what

Bank of America's note commented on a Wednesday report that American Airlines' Allied Pilots Association is opposing moves to exempt Boeing from a requirement that it install "modern cockpit alerting" systems in its Boeing 737 MAX 7 and MAX 10 airplanes in order to receive certification from the Federal Aviation Administration (FAA). As Reuters explains, unless the FAA certifies the MAX 7 and MAX 10 for flight by December, the new cockpit alert requirements will kick in for Boeing. And once those apply, Boeing will be required to make costly changes to both airplanes' designs to comply with the requirements.

For its part, Boeing says it shouldn't have to comply, because it's safer to have a single pilot alert system operating across all models of the 737, claiming there is less chance of confusing pilots. Nevertheless, the company doesn't expect to receive its exemption, and therefore doesn't expect to receive MAX 7 and MAX 10 approval before next summer.  

Now what

Now why is this a problem for Boeing? According to Bank of America, MAX 7s and MAX 10s make up approximately 22% of Boeing's order book, says StreetInsider. (Other 737 variants account for another 60%.) If certification of the MAX 7 and MAX 10 is delayed, therefore, then a big part of the company's revenue stream gets delayed as well.    

Moreover, the longer questions remain surrounding the MAX 7 and MAX 10, the more time Boeing rival Airbus (EADSY 0.95%) has to extend its lead over Boeing in both airplane sales and airplane deliveries of single-aisle jets. Granted, on the plus side, BofA thinks Boeing is still "dominant" in sales of widebody aircraft. But widebody Boeing 767, 777, and 787 airplanes -- although pricier than single-aisle planes and therefore a relatively bigger part of the revenue stream -- account for less than 20% of the company's order book. So long as the 737 line remains plagued with problems, Boeing's battling Airbus with one wing tied behind its back.

Add in the costs Boeing will incur if required to modify its pilot alert systems, and the news for the plane maker this week is pretty bad all around. At a forward P/E ratio of more than 25, and with its prospects darkening, now doesn't look like a great time to buy Boeing stock.