Boeing didn’t inform pilots about a control issue with some new 737 Max jets before a deadly Lion Air crash. The automated stall-prevention system on the Boeing 737 Max 8 and Max 9 models could push the nose down unexpectedly and then can’t be pulled back up. But pilots weren’t alerted to the new system on the Boeing 737 Max variants or issues with it, according to a Wall Street Journal report late Monday.
A Federal Aviation Administration manager told the Journal that the new system wasn’t highlighted in the training manuals. The aerospace giant only released the warning on the stall-prevention system after the Lion Air crash earlier this month in which 189 people were killed.
Boeing shares fell 2.1% to 349.52 on the stock market today, just above the the 200-day line after tumbling as low as 342.04. Boeing was a drag on the price-weighted Dow Jones industrial average. Boeing stock retreated 3.3% on Monday, undercutting its 50-day moving average. Airbus’ (EADSY) U.S.-listed shares advanced 2% to 27.03.
Boeing 737 Max Sales: The company has an over 4,000 jet backlog for the narrow-body Boeing 737 Max series. Boeing marketed the Max 8 model to airlines saying pilots wouldn’t need extra simulator training, government officials told the Journal.
A Boeing official told the Journal that the company didn’t want to overload pilots with too much technical information about the system. Boeing is now reportedly working on a software fix for the flight control system.
Teal Group aerospace analyst Richard Aboulafia said the issue seems relatively easy to fix and isn’t a major hardware problem. Boeing could take a “bit of a reputation hit,” he said. “But in terms of commercial impact you won’t see much.”
Boeing October Deliveries: Boeing delivered 43 737s last month, up from 37 a year ago. But that was down from 61 in September. Boeing delivered 12 787 Dreamliners for a delivery total of 57 commercial aircraft in October. That’s up from a 56 in 2017.
Boeing CFO Greg Smith said at the Baird Global Industrial Conference on Nov. 7 that October deliveries would be lower than normal with deliveries jumping in November and December. The aerospace giant has had issues with fuselage supplier Spirit AeroSystems (SPR) and engine supplier General Electric (GE).
“We’ve had challenges that have improved and we continued improvement certainly on the fuselage side, especially with Spirit,” Smith said. “GE is on a path to recovery, but not fully recovered and we don’t expect them to until the end of the year. A lot of the focus today is on GE and their supply chain,” he continued.
Boeing 737 production is on track to rise to 57 a month next year, from a planned 52-a-month rate in Q4. The Dow Jones aerospace giant is considering an even-faster pace in 2020.