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Report: Boeing could halt 737 MAX output over certification delay


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Report: Boeing could halt 737 MAX output over certification delay

Boeing Co. could halt production of the 737 MAX as the airplane's return to service gets pushed back to 2020, Reuters reported, citing two suppliers.

The aircraft manufacturer started considering decreasing output or stopping production altogether after the U.S. Federal Aviation Administration said it will not lift the grounding of the 737 MAX aircraft before the end of 2019, according to "a person briefed on the matter." The FAA maintains that there is no timeline set for the flight certification process for the troubled jets.

The Reuters source added that Boeing would be more likely to halt production than make another production cut. Boeing had cut production to only 42 planes per month from 52 in February, weeks before the 737 MAX was ordered grounded in March.

Boeing share prices fell 4% in pre-market trading Dec. 16, to $328.13 per share, while supplier Spirit AeroSystems Holdings Inc. suffered a 3.4% dip in share value. Berenberg analyst Andrew Gollan warned that Boeing's suppliers, also including Safran SA and Senior PLC, would experience "greater disruption impacts" in the event of a slowdown or stoppage in 737 MAX production.

Some suppliers might also continue production to reduce possible disruption, according to the two suppliers cited by Reuters.

Boeing is expected to make an official announcement regarding its 737 MAX output Dec. 16. The company had not responded to requests for comment from S&P Global Market Intelligence as of publication time.