Boeing 737 Max Production And Deliveries To Hit By Parts Issue; Stock Down

Boeing Co. has warned that production and deliveries of 737 Max, its best-selling planes, will be reduced in the near term due to issues with parts supplied by Spirit AeroSystems, reports said. The problem comes at a time when the airlines worldwide are experiencing a rebound in operations amid the peak travel season.

The expected pause in production and deliveries, amid an industry-wide shortage of new jets following the pandemic era, is likely to hit Boeing’s plan to deliver at least 400 MAXs in 2023.

Following the news, the aerospace major’s stock fell around 5 percent in the extended trading on Thursday, and Spirit shares fell nearly 12 percent.

The issue is with two fittings that join the AFT fuselage made by Spirit Aerosystems to the vertical tail that were not attached correctly.

Boeing reportedly said, “A supplier has notified us that a non-standard manufacturing process was used during the installation of two fittings in the aft fuselage section of certain 737-7, 737-8, 737-8-200 and P-8 model airplanes, creating the potential for a non-conformance to required specifications.”

According to the company, the problem, which affects a portion of the 737 MAX family of airplanes, is not a safety of flight issue and in-service planes can continue to operate safely.

But, the issue could affect a significant number of undelivered 737 MAX airplanes both in production and in storage, resulting in reduced 737 MAX deliveries. The exact number of aircraft impacted by the issue is yet to be determined.

Boeing has notified the issue to the Federal Aviation Administration and is working to inspect and address the fuselages as needed.

The company also said it is in contact with the affected customers concerning their delivery schedule.

Boeing plans to provide additional information in the days and weeks ahead.

Meanwhile, Spirit AeroSystems, which manufacturers some of the fuselages used in Boeing jets, reportedly stated that it notified Boeing of a quality issue with certain 737 models. The company is working to develop an inspection and repair for the affected fuselages.

As per Spirit website, it currently makes around 70 percent of 737 narrow-body aircraft for Boeing.

Meanwhile, airlines who operate with the affected Boeing plane models also expressed their concerns regarding the possible pause in deliveries. Southwest Airlines expects the issue to impact its delivery schedule of new Max planes.

American Airlines said it is working with Boeing to understand how it may impact its MAX deliveries.

Meanwhile, United Airlines is not expecting any significant impact to its capacity planes for this summer or the rest of 2023.

Boeing for years has been hit by production issues with its various planes. Earlier this year, the company had paused deliveries of its 787 Dreamliners for several weeks to address a data analysis flaw. In 2021 and 2022, the airplane maker revealed various other production flaws on the wide-body jets, halting deliveries for months.

The aviation giant, which has been trying to turn around after its 737 Max passenger jets were grounded worldwide following two fatal crashes, however recently reported significantly narrower loss in its fourth quarter, helped by 35 percent rise in revenues.

Boeing earlier this week had said it delivered 64 planes in the month of March and 130 commercial flights in the first quarter. Out of these, 113 were 737s and 11 were 787s, along with four 777s and one of 747 and 767.

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