By Senad Karaahmetovic
Spirit Aerosystems (NYSE:SPR) confirmed it has identified a quality issue on Boeing's (NYSE:BA) 737 that will impact near-term deliveries of the defense giant.
“A supplier has notified us that a non-standard manufacturing process was used during the installation of two fittings in the aft fuselage section of certain 737-7, 737-8, 737-8-200 and P-8 model airplanes, creating the potential for a non-conformance to required specifications,” Boeing said in a statement.
The issue affects “a significant number of undelivered 737 MAX airplanes, both in production and in storage.” It also expects the issue will affect some upcoming 737 MAX deliveries.
Spirit said it is working “to develop an inspection and repair for the affected fuselages.”
Bernstein analysts see a much bigger problem for Spirit than for Boeing.
“For Spirit, this situation is a more serious disappointment. We downgraded Spirit to MarketPerform, despite the industry recovery, because we lacked full confidence in Spirit's operational performance. We have seen prior quality issues on the 737MAX and 787. In Q4, there were new issues on the A350,” analysts wrote in a note.
“The fact that the issue with the fittings has been there since 2019 is concerning. Our greatest worry is that there could be further issues at Spirit, given the track record, which could derail both Spirit and Boeing's performance.”
Spirit stock price is down over 10% in pre-market Friday.