Boeing Co’s shares fell 6% in morning trading on Friday after the US planemaker halted deliveries of some 737 MAXs due to a new supplier quality problem by Spirit AeroSystems.
The issue will likely affect a “significant” number of undelivered 737 MAX airplanes both in production and in storage, and could result in lowered 737 MAX deliveries in the near term, Boeing disclosed on Thursday.
“I do think this is an overreaction from the stock, I can understand why it’s a shoot first and ask questions later because Boeing has impaired their trust with investors over the constant and repeated errors over the last few years,” said Thomas Hayes, chairman and managing member at Great Hill Capital.
Boeing has been plagued with supply chain headaches as it pushes to ramp up production of the bestselling MAX narrowbody jet, as well as its widebody 787 Dreamliner.
The company in February had to temporarily halt deliveries of the 787 Dreamliner to conduct additional analysis on a fuselage component.
The latest issue is also a headache for airlines waiting for deliveries. Southwest Airlines expects the issue to impact its current delivery schedule, while American Airlines said it was working with the planemaker to understand the effect. United Airlines, however, said on Thursday, it did not “expect any significant impact on capacity plans for this summer or the rest of the year.”
Shares of Spirit, which manufactures fuselage, thrust reversers, engine pylons and wing components for the 737 MAX airplanes, slumped 18.4%.
Published in The Express Tribune, April 15th, 2023.
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