(March 11): Boeing Co shares fell after it said a wiring flaw found on its 737 Max will delay some deliveries of the cash-cow narrowbody jet.
The US planemaker said its overall delivery target of roughly 500 of the 737 jets for the year remains unchanged despite the quality lapse, disclosed on Tuesday as the company reported monthly orders and deliveries.
“Our 737 programme is performing rework on a group of airplanes to fix wires that have small scratches due to a machining error,” a Boeing spokeswoman said in a statement. “This ensures they meet our quality standards before the airplanes are delivered.”
Boeing’s shares fell 3.2% in New York trading on Tuesday, the most since Nov 20.
Production of new 737 Max aeroplanes continues at the existing rate, Boeing said. The planemaker didn’t disclose how many aircraft were affected by the lapse. The company said it expects fixes to the scratches in the wiring of some undelivered planes to be completed in a matter of days.
The US Federal Aviation Administration said it is investigating the issue but declined to comment further.
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The issues with the wiring could pose “a near-term headwind” for Boeing’s results in the first quarter, Ken Herbert, an analyst at RBC Capital Markets, said in a note on Tuesday.
Boeing delivered 51 commercial planes in February, the most for that month since 2017, outpacing rival Airbus SE and providing another indication the US company is maintaining momentum in its turnaround.
Within its Seattle-area factory, Boeing is carefully monitoring work to assemble wings for the narrowbody jet, a potential chokepoint given the complexity of the work, Katie Ringgold, a vice president and general manager of the 737 programme, said at an aerospace event in San Diego.
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The company has secured commitments from CFM, the GE Aerospace-Safran SA joint venture, for enough engines to keep pace with manufacturing plans for this year and early 2027, Ringgold said.
Boeing remains on track to certify the smallest and largest 737 Max models this year, as it awaits approval from US regulators for a redesign of the engine anti-ice system, Ringgold said.
Like Airbus’ A320 family, the 737 is a closely watched programme given it is a crucial source of revenue for Boeing and key to paying down its debt.
Airbus has also struggled with quality issues in recent months. In December, the European planemaker said it would have to inspect hundreds of metal fuselage panels on the A320neo jet due to an issue with one of its suppliers.
Boeing recorded 21 gross aircraft orders for the month versus six cancellations. Net orders for the month totalled six when including an accounting provision for at-risk deals.
The monthly total included 43 of its 737 Max jets and three of the 787 Dreamliners. Three 767 planes and two 777 freighters rounded out the total, the company said. Airbus delivered 35 planes during the same period.
An unidentified party placed an order for six 767s for the KC-46 tanker programme. Boeing didn’t identify the customer but deferred to the US Department of Defence and the US Air Force for further explanation.
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The total order backlog with the accounting adjustment fell to 6,151 from 6,196.
Boeing is nearing one of the largest sales in its history: a 500-aircraft order for 737 Max jets set to be announced when US President Donald Trump travels to Beijing later this month. An agreement on the single-aisle planes hasn’t been finalised, Bloomberg reported last week.
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