LUV Stock – Airlines pull some Boeing 737 MAX jets after production snag
The glitch is the latest problem to beset Boeing‘s most-sold model but is not related to computer design problems that contributed to a 20-month safety ban in the wake of two crashes.
Regulators said the new problem involved the electrical grounding – or connections designed to maintain safety in the event of a surge of voltage – inside a backup power control system.
Boeing told airlines a fix could take hours or a few days per airplane, according to a notification seen by Reuters.
U.S. Transportation Secretary Pete Buttigieg said regulators wanted to ensure “full confidence” in the planes forced to halt flights on Friday, before they could fly again.
Shares in Boeing fell around 1.4% as most analysts told investors the issue was unlikely to cause lengthy disruption.
The issue affects about 90 planes globally, sources briefed on the matter said. That compares with 453 delivered since the plane first went into service, based on data up to end-February.
Boeing said a total of 16 operators were affected.
The top three U.S. 737 MAX operators – Southwest Airlines (LUV.N), American Airlines ((AAL).O) and United Airlines (UAL.O) – said they had removed a total of 63 jets from service following the notice from Boeing.
The chief operating officer of American Airlines, which said the issue affected 17 of its most recently delivered 737 MAX, told employees that Boeing has traced the issue to a production change made in the installation process.
People familiar with the matter said the problem had been traced back to a change in the material used for insulation once production of the 737 MAX resumed last year. A freeze on deliveries following the crashes was lifted in late 2020.
The status of Boeing deliveries was not immediately clear, with one source saying they too could be briefly disrupted.
LATE NIGHT SCRAMBLE
Although dozens of flights had to be canceled, Friday’s fallout was tiny compared to the global outcry following two 737 MAX crashes that killed 346 people in 2018 and 2019.
But Boeing‘s reaction to the fault underscored how much is at stake as it tries to rebuild confidence in its benchmark jet.
It scrambled late Thursday to brief staff, regulators and airlines on the issue, people familiar with the matter said.
It is seen as keen to demonstrate transparency after criticism for its initial defensive reaction to the cockpit safety issue that led to the 737 MAX grounding in 2019.
The U.S. Federal Aviation Administration (FAA) said it would ensure the issue was addressed.
Given a worldwide downturn in aviation as a result of the coronavirus pandemic, analysts said the gap left by the suspension of some MAX jets could be filled by other models.
Southwest, the largest 737 MAX operator, said it was swapping out 30 of its 58 planes but did not expect major disruption to its operations.
“We don’t think we will have a huge problem,” said Cowen analyst Helane Becker.
Air travel has been rebounding in the United States, one of the main markets for the MAX, after vaccinations for millions of potential travelers but could dip before end-May, she said.
“At that point, we are hopeful any of the grounded 737 MAX will be back in service,” Becker said.
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