FAA halt to Boeing Max production expansion to hit airlines, suppliers
- The US Federal Aviation Authority froze increases in production of the 737 Max, raising concerns over growth plans of airlines and suppliers worldwide
- The FAA announcement came hours after Boeing delivered its first 737 Max to a Chinese airline since March 2019, ending an almost five-year freeze
The aerospace industry faces widening disruption from the blowout of a panel on an Alaska Airlines Boeing jet after US regulators froze increases in production of the 737 Max, raising concerns over growth plans of airlines and suppliers worldwide.
The Federal Aviation Administration (FAA) announced the unprecedented intervention in production schedules late on Wednesday, in a double-edged decision that also saw the partial grounding of the Max 9 model lifted once inspections are done.
Boeing shares fell 2 per cent in US premarket trade. Shares of suppliers Spirit AeroSystems fell 3.9 per cent and Howmet Aerospace fell 3.3 per cent before the bell, while British supplier Senior was down 3.3 per cent in regular trade.
The ability to resume flying was a relief to US Max 9 operators Alaska Airlines and United Airlines, which had been forced to cancel thousands of flights and aim to begin returning the planes to service on Friday and Sunday, respectively.
But experts said the FAA’s response to “unacceptable” quality controls following the loss of a door plug at 16,000 feet on January 5 could delay some deliveries of new planes to airlines and hurt suppliers already reeling from an earlier Max crisis and the pandemic.