New Issues With Boeing 737 Max Fuselages Could Lead to More Delays

Boeing is facing yet another setback with its troubled 737 Max jetliner program. The company said that its supplier, Spirit AeroSystems, recently flagged issues with the fuselages of some 737 Max planes that are still awaiting delivery.

This latest manufacturing problem serves as another frustration for Boeing as it works to fully restore production of the Max after a 20-month grounding. It is unclear if the issues will further delay deliveries of the company’s crucial source of cash and profit.

Fuselage Issues Discovered on Undelivered Planes

Spirit AeroSystems, which makes fuselages and other parts for the 737 Max at a factory in Wichita, Kansas, told Boeing on February 3rd that sections of the fuselage may not meet regulatory standards.

Specifically, Spirit found areas where holes had been drilled incorrectly or missing entirely on part of the front fuselage section of some undelivered 737 Max jets.

“Based on our initial analysis, it appears the issue is confined to fuselages made at Spirit’s Wichita facility and affects a limited number of planes still in inventory,” Boeing said in a statement.

Approximately 50 total planes are believed to be impacted, though Boeing has not confirmed an exact number. The planes are with Boeing but have not yet been delivered to airline customers.

Boeing said it has quarantined the affected fuselages and increase inspections at its 737 factory in Renton, Washington to ensure any issues are addressed prior final assembly and delivery.

The company does not believe the problem will impact plans to continue increasing Max production rates this year. However, some additional delays to 737 Max deliveries are possible as Boeing works through the inventory of undelivered planes.

“We will continue to drive stability, predictability and safety in our production system as we manage through this,” Boeing said.

Another Black Eye for Boeing and Spirit

This fuselage setback represents another frustrating production issue for Boeing as it tries to turn the corner on the Max crisis that has cost it over $20 billion.

The Max was grounded globally in March 2019 after two fatal crashes killed 346 people. Boeing had to redesign faulty flight control software and implement other changes before regulators approved the plane to fly passengers again in late 2021.

While the fixes satisfied global regulators, Boeing has struggled operationally. This includes problems in its own factories as well as with suppliers like Spirit that are critical to Boeing’s manufacturing.

Spirit has faced its own production issues that have disrupted Boeing. A high number of employee turnover at Spirit’s plants has impacted productivity and quality control oversight.

“It is obviously a concern anytime holes are drilled incorrectly or missing altogether from structures that are designed to bear loads during flight,” said Richard Aboulafia, managing director at consultancy AeroDynamic Advisory.

Latest in String of Setbacks

This latest fuselage problem only adds to ongoing issues hampering Boeing’s ability to efficiently manufacture the 737 Max.

The company continues working through inspections and repairs on about 450 stored 737 Max jets built during the grounding but unable deliver due to other defects.

Issues have included electrical problems, improperly installed parts, debris left onboard, and now these fuselage defects. Boeing believes it can fix the defects rather than scrapping the planes.

“It appears fixable in Boeing’s factories but adds more disruption and cost,” said Scott Hamilton, managing director of Leeham Company, an aviation consulting firm.

Boeing has warned that additional inspections and repairs on stored jets could pose challenges to meet production and delivery targets this year. It aims to deliver about 500 Max planes in 2024 as air travel recovers globally.

Boeing Promises Stability While Facing Difficult Market

Boeing says it remains focused on safety, quality, and stability across its production system. However, experts say the company faces strong headwinds as it works through these lingering 737 Max manufacturing issues.

“There are tough dynamics impacting Boeing,” said Ken Herbert, analyst at Canaccord Genuity. “Demand is uncertain with signs global economies could be rolling over into recession later this year, supplies chains remain challenged, inflation is still problematic, and interest rates are forecast much higher.”

The company must tightly manage costs while also racing to modernize production of the 737 Max. At the same time, it aims to develop the next generation 737 Max 10 variant and a new midsize jetliner expected later this decade.

Boeing CEO David Calhoun has said it will take three to four years to generate free cash flow as Max production returns to higher levels. The company burned through $5 billion last year but expects to slow its cash burn rate this year.

Outlook for Boeing Remains Uncertain

Aviation experts say Boeing retains strong support from airlines who need the manufacturer to succeed. However, the fuselage issue serves as another frustration as Boeing tries rebuilding trust and proving the Max as a safe aircraft.

The company likely avoided significant design changes with this Spirit fuselage problem, meaning the fix should be fairly straightforward. But more work at Boeing’s factory only prolongs eventual delivery of these completed airframes.

And experts warn that Boeing’s turnaround timeline depends greatly on avoiding any further missteps with the Max program. That will require flawless execution getting stored jets ready for customers and efficiently ramping monthly production rates.

“There remains no room for error at Boeing if financial results are to markedly improve this year and next,” Herbert cautioned.

Supporting Tables and Images

Below are a few tables that help summarize key details related to the recent 737 Max fuselage issues:

Overview of Issue

History of Boeing 737 Max Crisis

And here is an image of a Boeing 737 Max plane, which has faced continued manufacturing setbacks:

Conclusion

Boeing still faces a complex path towards full recovery with its 737 Max program. The company had hoped to finally put the extended grounding and subsequent crises behind it this year.

However, ongoing defects and new problems like these defective fuselages show quality control and manufacturing stability remain inconsistent. Boeing must now contain the issue, thoroughly inspect all potentially impacted planes, and address any fixes needed.

Expert opinions conflict on whether this latest setback drastically impacts Boeing’s timeline towards free cash generation from the 737 program. But with the company already on thin margins for error, any added work only increases pressure and uncertainty facing aerospace giant.

Boeing will provide updated guidance on production and deliveries when it reports earnings at the end of April. Until then, the company says addressing regulatory requirements, safety, and quality are its top priorities as 737 program recovery continues.

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