(Adds detail from airlines, analyst comment)
By Alwyn Scott
SEATTLE May 10 Boeing Co said on
Wednesday it had temporarily halted test flights of its new 737
MAX aircraft due to an issue with the engine, which is jointly
made by General Electric Co and Safran SA of
The grounding comes days before Boeing was due to deliver
its first 737 MAX to an airline and marks a high-profile delay
in a program that Boeing had said was ahead of schedule.
It poses no safety concerns for travelers because no
airlines are yet flying the 737 MAX but it could mean a costly
disruption if the problem persists. Timely delivery is important
to planemakers as they get most of the payment for a plane when
it is handed to the buyer.
Boeing and engine maker CFM said they do not know how long
the delay will last.
Boeing shares fell 1.3 percent to $183.15 in afternoon
trading on the New York Stock Exchange. GE shares were down 0.9
percent at $28.67.
The 737 MAX replaces an older version of Boeing's
best-selling single-aisle aircraft, a key moneymaker for the
aerospace company. The 737 MAX 8, the first version of the plane
to be built, seats 162 passengers in a typical two-class
configuration. It carries a list price of $110 million but
airlines typically receive steep discounts.
A delay in getting aircraft to customers likely would cause
a build up in Boeing's inventory, "as planes essentially sit
waiting for engines," said analyst Rob Stallard at Vertical
"Investors are acutely focused" on the risks of speeding up
production of the new engine, known as the LEAP-1B, he said.
Separately, Airbus said it was continuing flights with its
A320neo, which is powered by the similar LEAP-1A engine and is
The 737 MAX grounding likely will mean a delay for Malindo
Air, a Malaysian carrier that had been expected to receive the
first 737 MAX delivery as early as Monday. Norwegian Air Shuttle
ASA, which was due to receive its first 737 MAX near
the end of May, said it expected a "a few days' delay."
"This will, however, not delay the launch of our upcoming
trans-Atlantic routes from the United States to Edinburgh,”
spokesman Anders Lindstrom said in an email.
Southwest Airlines Co, the initial customer for the
737 MAX, said Boeing had not warned it of any delays to its
delivery schedule. Southwest is expected to begin receiving the
jet later in the year after it retires some older 737s.
American Airlines Group Inc, which has 100 737 MAX
jets on order, declined to comment.
The issue arose late last week when Safran found a quality
problem in a large metal disc used in the low-pressure turbine
at the rear of the engine, said Jamie Jewell, a spokesman for
the engine maker, CFM International.
CFM notified Boeing, which immediately grounded the fleet of
about 21 planes. GE spokesman Rick Kennedy said the disc that
prompted the concern had not been installed in an engine.
"There have been no issues whatsoever with engines in the
field," Jewell said.
All of the 30 to 40 engines that have been built so far will
be sent either to Lafayette, Indiana, or Villaroche, France, for
inspection, Kennedy said. Many will need to be removed from
aircraft and shipped, Jewell said.
It was not clear how long the inspections would take to
complete. Safran received the disc from a supplier but there are
other suppliers of that part so production of the engine was
continuing, Kennedy said.
(Additional reporting by Alana Wise; Editing by Bill Rigby and