Boeing shares slump on signs of worsening 737 production issues
SHARES of Boeing and its top supplier sank on growing concerns that production flaws for its 737 MAX aircraft will take longer than expected to correct, further delaying deliveries of the cash-cow jet.
The US planemaker fell the most intraday in seven weeks on Friday (Oct 13), while Spirit AeroSystems dropped the most in almost a month. The Air Current reported late Thursday that Boeing is expanding inspections of the MAX’s aft pressure bulkhead for improperly drilled holes.
The report rounds out comments made Thursday by Michael O’Leary, chief executive officer of Ryanair, a major 737 MAX customer. MAX delivery delays have worsened because fixes to the aft pressure bulkhead appear to be more challenging, he said.
Boeing shares were down 3.1 per cent at 10.03am in New York, after falling as much as 4.3 per cent. Spirit, which supplies the faulty assemblies, dropped as much as 4.6 per cent.
The Air Current reported late Thursday that X-ray inspections of the aft pressure bulkhead on the 737 MAX have widened to include hand-drilled fasteners, in addition to the laser-guided installations previously under scrutiny. The added inspections and rework risk further slowing Boeing’s goal of ramping up production of the popular single-aisle aircraft.
Boeing notified the Federal Aviation Administration of its initial findings this week, along with customers already facing delivery delays of the MAX 8s, according to the report.
“We continue to take the time necessary to ensure each airplane meets our standards and regulatory requirements prior to ticketing and delivery,” Boeing said.
O’Leary said that he no longer expected Ryanair to receive 57 aircraft by the end of June, cutting into the airline’s flying capacity next summer.
The quality lapses are disrupting deliveries as Boeing works to ramp up production of the MAX, potentially risking friction with more customers. The issues also threaten profitability at the US planemaker as well as at Spirit, whose CEO stepped down this month. BLOOMBERG
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