Boeing shares fell as a parts issue halted deliveries of some 737 MAXs

April 14 (Reuters) – Shares in Boeing Co ( BA.N ) fell 6% in morning trade on Friday after the U.S. planemaker halted deliveries of some 737 MAXs due to a quality problem with a new supplier from Spirit Aerosystems ( SPR.N ).

Boeing announced Thursday that the issue will affect a “significant” number of undelivered 737 MAX aircraft in production and storage, and could result in a reduction in 737 MAX deliveries soon.

“I think it’s an overreaction of the stock, understanding why it was shot in the first place and asking questions later, because Boeing has weakened investors’ confidence over the past few years because of repeated and repeated errors,” said Chairman Thomas Hayes. and Managing Member at Great Hill Capital.

Boeing has suffered supply chain headaches as it ramps up production of its best-selling MAX narrowbody jet and its widebody 787 Dreamliner.

In February the company had to temporarily halt deliveries of the 787 Dreamliner.

The latest issue is also a headache for airlines waiting for deliveries. Southwest Airlines ( LUV.N ) expects its current delivery schedule to be affected, while American Airlines ( AAL.O ) said it was working with the planemaker to understand the impact.

However, United Airlines said Thursday that it “does not anticipate a significant impact on capacity plans for this summer or later in the year.”

Analysts are also concerned that the latest hiccup will hurt Boeing’s cash flow.

Earlier this year, the planemaker reported its first positive free cash flow since 2018, emerging from two fatal crashes of the 737 Max that prompted the plane to be grounded globally.

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While the latest quality issue is related to a fuselage fitting supplied by Spirit and believed to date back to 2019, Boeing said it was not a safety of the aircraft issue and that the planes in service could continue to operate.

Shares of Spirit, which makes the fuselage, thrust reversers, engine pylons and wing parts for the 737 Max, fell 18.4%.

“The general consensus from our experts is that these players don’t have the skilled workforce needed to support the manufacturing pipeline targeted by OEMs like Boeing and Airbus,” said Third Bridge analyst Christopher Wright.

Aishwarya Nair reports in Bangalore; Editing by Sriraj Kallu

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