Boeing halts deliveries of some 737 MAXs due to new supplier issues

WASHINGTON, April 13 (Reuters) – Boeing ( BA.N ) has halted deliveries of some 737 MAXs as it grapples with a new quality problem from Spirit AeroSystems ( SPR.N ) that could stretch back to 2019, the U.S. said the aircraft manufacturer on Thursday.

The issue is likely to affect a “significant”[ads1]; number of undelivered 737 MAX aircraft both in production and in storage, and could result in reduced 737 MAX deliveries in the near term, the company said.

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

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

The Federal Aviation Administration said it had “validated” Boeing’s assessment that there was no immediate safety issue “based on the facts and data that Boeing presented,” and the agency will evaluate all affected aircraft before delivery.

The problem involves the installation of two fittings connecting the aft fuselage made by Spirit to the vertical tail, which were not properly attached to the structure of the fuselage before it was shipped to Boeing. Certain versions of the aircraft, such as the MAX 9, use fittings from different suppliers and were installed correctly.

Boeing was officially notified of the problem by Spirit on Wednesday, but the problem is believed to date back to 2019 and the company is still determining how many planes may be affected, Boeing said.

Boeing declined to comment on whether the problem will force it to roll back plans to increase 737 production this year as it races to deliver at least 400 MAXs by 2023. The company, which announced deliveries of 111 MAXs during the first quarter, aimed to increase monthly MAX production rates from 31 to 38 by June.

“We have notified the FAA of the issue and are working to conduct inspections and replace the non-conforming fittings where necessary,” Boeing said. “We apologize for the impact this issue will have on affected customers and are in contact with them regarding their delivery schedule.”

United Airlines ( UAL.O ) said late Thursday after discussions with Boeing that “at this time, we do not expect any significant impact on our capacity plans for this summer or the rest of the year.”

Spirit said it is working to develop an inspection and repair for the affected fuselages. Officials said the FAA is likely to issue an airworthiness directive that would mandate an inspection and repair regime.

The FAA has been closely scrutinizing Boeing aircraft since two fatal plane crashes in 2018 and 2019. The FAA continues to inspect every 737 MAX and 787 aircraft before a certificate of airworthiness is issued and approved for delivery. Generally, the FAA delegates air ticket authority to the manufacturer.

Reporting by Valerie Insinna Editing by Chris Reese

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