Boeing Pauses MAX Deliveries After Parts Problem

Plane maker said a supplier used nonstandard process to install parts

Boeing Co. said it was pausing deliveries of some 737 MAX jets because of incorrectly installed parts, disrupting an important business line as the plane maker seeks to improve its finances.

The company said Thursday there would be a significant impact on near-term deliveries of the 737 MAX 7, 737 MAX 8 and larger MAX 8-200 jets, as well as the P-8 military reconnaissance planes that are also based on the 737.

Boeing said it was notified by a supplier of “a nonstandard manufacturing process” used to install two fittings at the rear of the plane. Regulators have strict rules on parts installation, and Boeing said it was in contact with the Federal Aviation Administration over the issue.

Spirit AeroSystems Holdings Inc said it was the supplier, and that it was working to develop a repair for the affected fuselages.

Shares of the plane maker declined 4.3% in after-hours trading, and shares of Spirit AeroSystems fell 7.8%. The delivery pause and supplier problem was reported earlier by CNBC.

The MAX problem is the latest for Boeing this year following the temporary suspension of 787 and 767 deliveries because of problematic parts and regulatory issues.

The company this week said it delivered 52 MAX jets to 13 different customers in March. It was one of Boeing’s best performances since it resumed handing over the jets following its prolonged grounding, outpacing Airbus SE in total first-quarter deliveries.

Boeing said in January it aimed to deliver 400 to 450 of the jets this year, and handed over 117 in the first quarter. Deliveries of the MAX and the 787 Dreamliner are central to its plans to reverse the outflow of cash from the company.