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Boeing Falls Following Cautious 737 MAX Flight Suspensions

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Boeing Falls Following Cautious 737 MAX Flight Suspensions

Boeing Co (NYSE: BA) shares plummeted as much as 3 percent Wednesday as traders circulated reports that 737 MAX test flights were suspended for engine inspections.

The company later confirmed the temporary halt, citing issues with low-pressure turbine discs in the LEAP-1B engines developed jointly by General Electric Company (NYSE: GE) and Safran SA (EPA: SAF). However, it reportedly assured that the concern is with a quality control problem among a specific batch of parts rather than a serious design flaw.

"Out of an abundance of caution, we decided to temporarily suspend MAX flights,” Boeing said in a statement. “The step is consistent with our priority focus on safety for all who use and fly our products.”

Nonetheless, Boeing doesn't expect the inspection to disrupt the aircraft’s delivery schedule. Airline clients are still set to receive the model by the end of May.

According to the company’s website, the 737 MAX is a significant portion of the business as it comprises 108 of the company’s 210 year-to-date orders. Global customers include American Airlines Group Inc (NASDAQ: AAL), United Continental Holdings Inc (NYSE: UAL) and Southwest Airlines Co (NYSE: LUV).

Although a mid-day Cowen note suggested that the "373 MAX engine issue looks like a very short term blip that should be easily correctable,"shares were trading down 1.8 percent at $182.12.

Posted-In: 737 MAX Cowen SafranNews Travel Movers General Best of Benzinga

 

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