Boeing Halts 737 MAX Deliveries Due To Electrical Issues, Shares Fall By Reuters

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2/2 © Reuters. FILE PHOTO: FILE PHOTO: Boeing logo displayed at LABACE fair in Sao Paulo 2/2

By Ankit Ajmera and Eric M. Johnson (Reuters) – Boeing Co said Wednesday that it has paused deliveries of the 737 MAX due to an electrical problem that has partially grounded the fleet, and issued cautionary notes on the increase in cases. of coronavirus in India and the United States simmering- Geopolitical tensions in China. Shares of Boeing (NYSE 🙂 fell nearly 3% after the US aircraft maker reported its sixth consecutive quarterly loss and one position in its high-profile Air Force One presidential jet program. The minor loss and an avalanche of technical and financial challenges clouded optimism about a resurgence of the US domestic travel market, fueled by vaccines and stifled demand. “We view 2021 as a critical turning point for our industry,” Chief Executive Dave Calhoun told analysts on a conference call. Boeing has stopped deliveries of the 737 MAX to address electrical issues and hopes to “catch up with deliveries for the rest of the year,” Calhoun added. He also said he expects China to lift its grounding order on the 737 MAX in the second half of 2021. But Calhoun previously told CNBC that he could not predict when the grounding problem for the 737 MAX would be resolved, and it doubled. as a precaution over time. -outside the recovery of international travel, citing the impact of the pandemic and relations between Washington and Beijing. Boeing has delivered more than 85 737 MAX aircraft, out of a backlog of about 400 aircraft, since most regulators cleared it to re-enter service late last year after two fatal accidents, boosting revenue and cash flow. But Boeing’s workhorse for short-haul travel remains banned in China’s market rebound, where Boeing remains exposed to long-standing geopolitical tensions that have continued under US President Joe Biden. A new grounding problem found on some models of the plane earlier this month has also overshadowed Boeing’s recently reaffirmed plans to increase production of 737 MAXs to 31 planes per month by early 2022. Airlines have recalled dozens of 737 MAX aircraft in service, awaiting repairs. Last week, Boeing said it extended its required retirement age from 65 to 70 to allow the 64-year-old Calhoun to remain in the top spot. Calhoun aims to stay in the role until age 70, insiders say. His decision surprised many in the industry who saw him as a short-term crisis manager and triggered the upcoming departure of Boeing’s respected CFO and heir apparent to the position, 54-year-old Greg Smith. Boeing also reaffirmed a greatly reduced production rate. of five 787 airliners per month after consolidating production at its South Carolina factory. It faces reduced demand due to the impact of the pandemic on long-haul travel and an ever-increasing price tag for 787 renovations due to embedded production defects in dozens of advanced carbon-composite airliners. It still expects to deliver the first 777X mini-jumbo in late 2023 despite certification and design challenges, with combined production of the new 777X and its legacy 777 model of two a month. The US aircraft maker reported a core operating loss of $ 353 million in the first quarter, its sixth consecutive quarterly loss, compared with a loss of $ 1.70 billion a year earlier. Boeing recorded a $ 318 million pretax charge related to the Air Force One presidential jet. Boeing sued supplier GDC earlier this month for failing to complete interior work on the two heavily modified 747-8 Air Force One jets. GDC responded, seeking at least $ 20 million to cancel the contracts. GDC Technics filed for bankruptcy on Monday. In July 2018, Boeing was awarded a $ 3.9 billion contract to build two 747-8 aircraft for use as Air Force One, to be delivered in December 2024. In the quarter, Boeing completed a hot fire engine test. on NASA’s upcoming SLS rocket. and began production of the new US Air Force training aircraft.