Boeing halts deliveries of some 737 MAXs amid new supplier problem By Reuters

Written by Valerie Encina and David Shepardson

The US planemaker revealed today, Thursday, that Boeing has halted deliveries of about 737 Max while it faces a new supplier quality issue by Spirit AeroSystems (NYSE: NYSE) that may extend into 2019.

The company said the problem would likely affect a “significant” number of 737 Max aircraft that were not delivered either in production or in storage, and could lead to a reduction in 737 Max shipments in the near term.

Boeing (NYSE) shares fell 5.3% and Spirit AeroSystems shares fell 11.8% in after-hours trading following the announcement.

The issue, which affects a portion of the 737 MAX family of aircraft, including the MAX 7, MAX 8, and MAX 8200 aircraft as well as the 737 NG-based P-8 Poseidon Maritime Observer, is not a flight safety issue. Boeing said aircraft in service could continue to operate.

The FAA said it had “validated” Boeing’s assessment that there was no immediate safety problem “based on the facts and data provided by Boeing” and the agency would evaluate all affected aircraft prior to delivery.

The problem involves the installation of two fittings connecting the rear fuselage by Spirit to the vertical tail, which were not properly attached to the fuselage structure prior to being sent to Boeing. Certain versions of the aircraft, such as the MAX 9, use formulations from different suppliers and are properly fitted.

Boeing said Spirit was officially notified of the problem on Wednesday, but the problem is believed to date back to 2019 and the company is still working out how many aircraft could be affected.

Boeing declined to comment on whether the problem would force it to backtrack on plans to increase 737 production this year as it races to deliver at least 400 Max in 2023. The company, which announced 111 Max deliveries during the first quarter, had aimed to increase monthly maximum production rates from 31 to 38 by June.

“We have reported the issue to the Federal Aviation Administration and are working to conduct inspections and replace non-conforming fixtures as necessary,” Boeing said. “We regret the impact this issue will have on affected customers and are communicating with them regarding their delivery schedule.”

“At this time, we don’t expect any significant impact on our energy plans for this summer or the rest of the year,” United Airlines said late Thursday, after discussions with Boeing.

Spirit said it is developing an examination and repair of the injured fuselage. Officials said the FAA is likely to issue an airworthiness directive mandating the inspection and repair regime.

The FAA has been closely examining Boeing planes since two fatal plane crashes in 2018 and 2019. The FAA continues to inspect every 737 MAX and 787 before issuing a certificate of airworthiness and approving them for delivery. Typically, the FAA delegates authority to issue plane tickets to the manufacturer.