Boeing warns of 737 Max delays over quality problem

Boeing 737 Max display at Farnborough Airshow

Boeing shares have tumbled more than 6% after the US plane-maker disclosed a manufacturing issue affecting its 737 Max planes.

The aviation giant said a supplier had revealed that the installation of fittings on the rear of the planes did not follow the standard.

Boeing said the problem was not an "immediate safety of flight issue".

But it warned it could lead to delivery delays.

"We regret the impact that this issue will have on affected customers and are in contact with them concerning their delivery schedule," the company said in a statement.

The latest problem comes as Boeing has been under intense scrutiny since two accidents in 2018 and 2019 involving its 737 Max planes killed 346 people.

Authorities said the accidents were triggered by design flaws in its flight control software. Boeing ultimately agreed a $2.5bn settlement with US authorities, who had accused the firm of concealing information from regulators about updates to the system.

Thomas Hayes, chairman and managing member at Great Hill, said investors may be over-reacting to the current issue.

Shares in Spirit Aerosystems, Boeing's supplier, also plunged more than 20% on Friday, following the disclosure.

But, he added, "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."

Boeing's 737 Max was grounded for more than a year following the accidents.

The company has also faced a series of supply issues as it tries to emerge from the cloud cast by that scandal and ramp up production.

In February, the firm was forced to halt deliveries of its widebody 787 Dreamliner due to a problem with its data analysis. US transportation regulators cleared Boeing to resume deliveries last month.

Boeing said a "significant number" of undelivered jets in production and in storage were affected by the new issue, which affects 737 Max family of airplanes, including the Max 7, Max 8 and Max 8200 airplanes, in addition to is P-8 Poseidon maritime surveillance aircraft. Some planes involved are already in service.

The company said it was working with regulators to conduct inspections and replace fittings "where necessary".

"This is not an immediate safety of flight issue and the in-service fleet can continue operating safely," the company said.

Delivery delays from Boeing could worsen problems at airlines, which have have been scrambling to upgrade their fleets as demand for air travel soars.

Southwest Airlines, one of Boeing's big customers, said it expected its orders to be delayed by the new issue, while United Airlines said it did not expect to be affected.

American Airlines said it was still working to understand the impact.

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