CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

FAA decision to freeze Boeing production at current levels will impact suppliers

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The US Federal Aviation Administration has ordered Boeing to freeze planned increases in production of its 737 MAX jet following recent safety concerns. PHOTO courtesy Boeing.

The US Federal Aviation Administration’s (FAA) order to freeze increases in production of Boeing’s 737 MAX jet following recent safety concerns will disrupt the aerospace supplier market.

Boeing was looking to increase production of its best-selling single-aisle 737 MAX family in order to stay in tune with rising demand and close the gap with competitor Airbus. In October, Boeing CEO Dave Calhoun said the company planned to reach production of 38 MAX planes per month by the end of 2023.

Boeing’s latest 737 master schedule, which sets the production pace for suppliers, called for production to rise to 42 jets per month in February, 47.2 in August, 52.5 by February 2025 and 57.7 in October 2025, Reuters reported in December.

Under the new FAA order, Boeing can continue producing MAX jets at the current monthly rate, but it’s not allowed to increase that rate. The FAA offered no estimate of how long the limitation would last and did not specify the number of planes Boeing can produce each month.

There is concern the FAA’s response to “unacceptable” quality controls following the loss of a door plug at 16,000 feet on Alaska Airlines Boeing jet on Jan. 5 could delay some deliveries of new planes to airlines and hurt suppliers.

As a result, shares of suppliers Spirit AeroSystems fell 3.9% and Howmet Aerospace fell 3.3% before the bell, according to report from Reuters.

Southwest Airlines has already changed its fleet plans for 2024, saying it expected to take fewer deliveries of 737 MAX aircraft, according to Reuters.

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