Boeing (BA) shares fell 3% in early trading Thursday after a quality issue was detected on its 737 MAX involving supplier Spirit AeroSystems (SPR) which it said could delay deliveries. Shares of Spirit AeroSystems fell more than 15%.
KEY THINGS TO REMEMBER
- Boeing said a quality issue detected in its 737 MAX linked to supplier Spirit AeroSystems could impact deliveries.
- Earlier this year, Boeing had to halt its shipments due to other Spirit AeroSystems related quality issues.
- Boeing and Spirit AeroSystems shares fell in early trading on Thursday on the news.
Boeing reportedly identified mounting holes that did not comply with specifications in the rear pressure bulkhead of some 737 MAX aircraft and reportedly warned that it could miss its delivery target of at least 400 737s this year.
This issue is expected to delay the first MAX 8 deliveries to Malaysia Airlines, expected later this month. However, Spirit AeroSystems said not all 737s would be affected because it uses different suppliers to manufacture the rear pressure bulkheads.
Earlier this year, Boeing had to halt deliveries in April due to other quality issues with Spirit AeroSystems. At the time, the problem was with fitting fittings that connected the rear of the fuselage to the vertical stabilizer and were loosely attached to the fuselage structure. The issue affected a number of models in the 737 MAX family, including the MAX 7, MAX 8 and MAX 8200. The 737 NG-based P-8 Poseidon maritime surveillance aircraft was also affected.
Despite Thursday's Down , Boeing shares are up nearly 13% year-to-date, while shares of Spirit AeroSystems have lost more than a third of their value.
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