737 MAX GROUNDED
Boeing halts test flights due to engine issue and delivery to customers, including Malindo, will be delayed for now
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 France.
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 programme that Boeing had said was ahead of schedule.
It poses no safety concerns because no airlines are yet flying the 737 MAX, but it could mean a costly disruption if the problem persists. Boeing and engine-maker CFM say they do not know how long the delay will last.
Timely delivery is important to planemakers as they get most of the payment for a plane when it is handed to the buyer.
A delay likely would cause a buildup in Boeing’s inventory, “as planes essentially sit waiting for engines”, said Vertical Research Partners analyst Rob Stallard.
Separately, Airbus said it was continuing flights with its A320neo, which is powered by the similar LEAP-1A engine and is flying customers.
Malaysian carrier Malindo Air was set to receive the first 737 MAX delivery on Monday and use the jet for its Kuala Lumpur-Singapore route from May 19.
But Malindo chief executive officer Chandran Rama Muthy said it did not plan to use the plane until May 22, without elaborating on the reason for the delay. Reuters
A Boeing 737 MAX on the runway of Boeing’s manufacturing facility in Renton, Washington. A delay in getting planes to customers will likely cause a buildup in its inventory, hurting the company’s bottom line.