Problems at Boeing: non-compliant parts fitted on the 737 MAX

Boeing had just scored a notable success with a surge in quarterly deliveries, overtaking rival Airbus for the first time in nearly five years. Unfortunately this week came bad news for the aeronautical giant: some parts of the 737 MAX jet were installed with inadequate components, causing the interruption in the delivery of the planes and long delays. Boeing expects a significant impact on near-term deliveries of 737 MAX 7, 737 MAX 8 and MAX 8-200 jets, as well as P-8 military reconnaissance aircraft.

$BA will pause the delivery of some 737 Max models after the company discovered issues with a supplier's component. @Lebeaucarnews reports: pic.twitter.com/5vB1qCMbuZ

— Squawk Box (@SquawkCNBC) April 14, 2023

According to Barron's , a statement was sent via email from a company spokesperson, who explained the issue:

“ A supplier has notified us that a non-standard manufacturing process was used when installing two fittings in the rear fuselage section of some [737 MAX] aircraft, creating the possibility of a non-conformance to the required specification.” “ This is not an immediate flight safety issue and the in-service fleet can continue to operate safely. However, the issue will likely affect a significant number of undelivered 737 MAX airplanes, both in production and in storage .”

Boeing also said the Federal Aviation Administration has been notified of the manufacturing problems and efforts are underway to examine and replace defective parts. Bloomberg has identified Spirit AeroSystems Holdings Inc. as the supplier of the nonconforming parts.

Obviously the blow to the company's shares was strong with a drop, as mentioned, of the order of 5%

Max's problems have been of concern to investors, as the plane was globally grounded from March 2019 to November 2020 after two fatal crashes within five months of each other, which caused the death of 346 people. It remains to be seen whether the production issue will have a significant impact on Boeing's plan to ramp up 737 production. The issue isn't immediately about the safety of airplanes in service with the airlines.

For more details on the situation, Bloomberg Intelligence said:

“The shutdown is concerning, given that the aircraft is vital to Boeing's relaunch. Its importance likely means that a remedy will be urgently pursued, even though rework could be costly and an extended pause would significantly hurt trading profits, cash generation and balance sheet.

“We have processes in place to address these types of manufacturing issues upon identification, which we are following,” Spirit said in a separate release. "Spirit is working to develop an inspection and repair for the affected fuselages," wrote George Ferguson, an aerospace industry analyst at BI.

The troubled times for Boeing do not seem to be over, just as the competitor Airbus announces the sale of 300 aircraft to China and the conclusion of an agreement for the opening of a second production line. Boeing will have to overcome its production problems in order to permanently overtake its European competitor.

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The article Boeing problems: non-conforming parts mounted on the 737 MAX comes from Scenari Economics .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/176048-2/ on Sat, 15 Apr 2023 08:00:42 +0000.