(Bloomberg) -- Boeing Co. shares extended their 2024 rout after analysts and a key customer voiced concerns that scrutiny of planemaker’s manufacturing since a Jan. 5 near-disaster with a 737 Max 9 could ripple through to aircraft deliveries. 

Boeing shares fell as much as 8.4% in New York trading Tuesday, while Spirit AeroSystems Holdings Inc., which builds most of the 737 Max frame, declined as much as 7.5%. The drop brought Boeing’s year-to-date slide to around 23%, the largest among the 30-member Dow Jones Industrial Average.

Meanwhile, the planemaker announced that retired Admiral Kirkland Donald is serving as special adviser to Boeing Chief Executive Officer Dave Calhoun, effective immediately — another step in Boeing’s efforts to shore up confidence in its manufacturing prowess after the accident on Alaska Airlines Flight 1282. Donald will lead a “thorough assessment” of Boeing’s quality management system for commercial airplanes.

Read more: Boeing Bonds Widen on Concerns Max Blowout Will Slow Deliveries

Investors have erased a late-2023 gain in Boeing shares as concerns grow about the longer-term implications from the Alaska Airlines mid-air structural failure. Analysts at Wells Fargo downgraded Boeing from equal-weight from overweight, citing an increased risk that regulatory checks into the company’s manufacturing quality will drag on deliveries — particularly the inventory of hundreds of already-built Max.

Similar concerns were voiced separately by Ryanair Holdings Plc Chief Executive Officer Michael O’Leary — one of the biggest customers for the 737 Max —  at an event in London on Monday.

“I think the risk is that there will be further delivery delays, that Boeing management will get distracted in Seattle or there’ll be new processes or something,” O’Leary said in an interview.

Related: Ryanair Warns Boeing Mishap Puts Summer Max Deliveries at Risk

The Federal Aviation Administration has grounded most Max 9 jets, a measure it intends to keep in place until extensive inspections are complete. The air-safety agency is investigating manufacturing practices at Boeing in the wake of the accident, when a door-sized fuselage panel tore off of the Alaska Airlines flight shortly after takeoff. 

The FAA also said it will increase monitoring of so-called “in-service events” on the Max 9, and plans to audit Boeing’s production line as well as those of its suppliers.

“Given BA’s recent track record, and greater incentive for FAA to find problems, we think the odds of a clean audit are low,” Wells Fargo’s Matthew Akers wrote in a note to clients. 

The intense scrutiny into quality controls at Boeing and Spirit “could pressure production increases” that the planemaker had planned this year for the Max, said Ron Epstein, an analyst with Bank of America. This could weigh on cash margins on a jet family that’s critical source of profit, he said. Epstein lowered his target price on Boeing stock to $255 from $275, Tuesday, citing “increased near-term risks and waning investor appetite.”

Boeing is stepping up its own internal inspections, and will grant customers greater access to its factories, commercial chief Stan Deal told employees in a memo released on Monday.

O’Leary said Tuesday he was doubling Ryanair engineering staff onsite at Boeing’s factory in Washington and at Spirit’s campus in Wichita, Kansas. 

Airline Checks

The move follows Alaska Air Group Inc.’s decision over the weekend to expand quality checks on Boeing production. Airlines in China, meanwhile, will hold back on an expected restart of 737 deliveries, Bloomberg reported.

Donald’s appointment comes a day after Deal said Boeing will also bring in its own outside experts to review its quality controls and suggest improvements. The retired admiral served as a nuclear-trained submarine officer for 37 years, and eventually led the US Navy’s nuclear propulsion program for eight years, having oversight of its fleet of nuclear-powered ships.

Currently chairman of shipbuilder Huntington Ingalls Industries Inc., Donald will head a team of company outsiders in a deeper dive into quality programs and practices in Boeing’s factories and its oversight of commercial supplier quality. His recommendations will be shared with Calhoun and the Boeing board’s aerospace safety committee, which was created following two 737 Max crashes in 2018 and 2019, Boeing said.

“We are honestly astonished, given the company’s legacy and heritage, that an outside party is required to make recommendations,” Epstein, the Bank of America analyst, wrote in a note to clients before the announcement.

Analysts remain upbeat about the company’s longer-term turnaround prospects despite its plunging share price. Of the Wall Street analysts tracked by Bloomberg, 24 have “buy” ratings, with eight “holds” or equivalent. None of the analysts has a sell rating on Boeing.

--With assistance from Katrina Compoli.

(Updates with news of Boeing appointment, shares)

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