Boeing production issue prompts airlines to pull some 737 MAX jets from service

imageStock Markets48 minutes ago (Apr 09, 2021 11:05AM ET)

(C) Reuters. FILE PHOTO: A Boeing 737 MAX airplane lands after a test flight at Boeing Field in Seattle

By David Shepardson, Tracy Rucinski and Ankit Ajmera

WASHINGTON (Reuters) -U.S. airlines temporarily suspended the use of more than 65 Boeing (NYSE:BA) 737 MAX jets on Friday after the planemaker asked 16 carriers that operate the aircraft to address an electrical power system issue.

The U.S. Federal Aviation Administration (FAA) said Boeing had notified it late Thursday of its recommendation to temporarily remove some planes from service to address a manufacturing issue that could affect the operation of a backup power control unit.

Southwest Airlines (NYSE:LUV) removed 30 MAX airplanes from its schedule Friday, while American Airlines (NASDAQ:AAL) pulled 17 of its 41 MAX models. United Airlines removed 16 of its 30 MAX airplanes and Alaska Airlines four aircraft.

Sources briefed on the matter said the issue affects about 90 airplanes. Boeing told airline and leasing companies that the repairs could take a matter of hours or a few days, according to a notification seen by Reuters.

The FAA said it is in contact with the airlines and the manufacturer, and will ensure the issue is addressed. Boeing shares were down 1.5% in early Friday trading.

The 737 MAX returned to service in November after a 20-month safety ban triggered by two fatal crashes that killed 346 people. The plane has continued to face close scrutiny since it resumed flights.

Boeing said in a statement that it wants 16 MAX operators to check and verify that a “sufficient ground path” exists for a component of the electrical power system.

American Airlines Chief Operating Officer David Seymour said in a memo to employees seen by Reuters that Boeing has traced the issue to a production change made in the installation process.

“(This) occurred after our last aircraft was delivered before the fleet grounding in March 2019,” he said.

A Boeing spokeswoman said the issue was not related to a key safety system tied to both fatal crashes called MCAS, which had led to the wider safety grounding.

American Airlines said the issue impacts 17 of its most recently delivered airplanes.

Teal Group analyst Richard Aboulafia said it was not clear how big an impact the issue will have.

“If it’s a glitch that’s either just a false alarm or something easily checked in a day or so, it will be forgotten quickly,” he said in an email.

“But since it’s just a batch of planes, and not all MAXs, it’s probably not related to the design.”

Boeing production issue prompts airlines to pull some 737 MAX jets from service

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