The airline statement said "search and rescue operations are in progress and we have no confirmed information about survivors or any possible casualties".
A statement from Ethiopian Airlines reads: "Ethiopian Airlines regrets to confirm that its flight ET 302/10 March in schedule service from Addis Ababa to Nairobi was involved in an accident today around Bishoftu (Debre Zeit)". He said the plane "is now right inside the ground" and it was not possible to identify whether it was an emergency landing or a crash.
China is an important market for the United States aircraft company, accounting for about one-fifth of worldwide deliveries of Boeing 737 MAX models.
An Ethiopian Airlines plane has crashed on its way to Nairobi, Kenya, with 157 passengers on board. "I just pray that he is safe or he was not on it", said Agnes Muilu, who had come to pick up her brother. It has flown more than 1,200 hours.
Swedish flight tracker flightradar24.com said on its Twitter account that: "Additional data from Flightradar24 ADS-B network show that vertical speed was unstable after take off".
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Boeing and joint venture partner Commercial Aircraft Corporation of China (COMAC) operate a plant in the eastern city of Zhoushan that completes the interiors of 737 MAX planes for Chinese airlines.
Air traffic control lost contact with the Boeing 737-800MAX six minutes after taking off from Bole International Airport in Addis Ababa, according to Ethiopian airlines.
Ethiopian is one of the biggest carriers on the continent by fleet size.
Police and troops were on the scene, as well as a crash investigation team from Ethiopia's civil aviation agency.
Its last major crash was in January 2010, when a flight from Beirut went down shortly after take-off, killing all 90 people onboard.