New Boeing 737 MAX supplier defect to delay aircraft deliveries

By Valerie Insinna and David Shepardson

(Reuters) -Boeing has recently identified a new 737 MAX quality problem involving supplier Spirit AeroSystems (NYSE:) that has resulted in improperly drilled holes on the aft pressure bulkhead, the planemaker said on Wednesday.

Boeing (NYSE:) said the defect will delay near-term deliveries and the company is evaluating whether it could cause it to miss its annual delivery target of at least 400 737s this year.

Boeing shares were down 2.7% and Spirit shares fell 6.1% in afterhours trading.

The new supply-chain snag is the latest issue to impede deliveries of the cash-generating MAX following Boeing’s disclosure of a problem in April that Spirit had improperly installed brackets joining the aft fuselage to the vertical tail.

Boeing confirmed that the latest issue will delay the first MAX 8 delivery to Malaysia Airlines, which had scheduled an Aug. 28 arrival event.

Spirit said that because it uses multiple suppliers for the aft pressure bulkhead, not all 737 fuselages are impacted by the new “elongated” hole problem.

“Based upon what we know now, we believe there will not be a material impact to our delivery range for the year related to this issue,” Spirit said.

So far, Boeing believes the defect is limited to a portion of its bestselling MAX 8 model, but the company is evaluating whether older-model 737 Next Generation jets are also impacted.

It is unclear how many jets will need to be fixed, and how long it takes to complete rework will vary depending on the condition of the aircraft, Boeing said.

“We continue to deliver 737s that are not affected,” said Boeing, which said the issue was “recently” discovered but did not provide further clarification.

Spirit said it has implemented changes to its manufacturing processes to correct the issue.

The Federal Aviation Administration said it was aware of the issue, which does not affect safety of flight.

Trade publication The Air Current first reported that Spirit was responsible for the work on the aft pressure bulkhead.