Boeing production issue prompts pulling out of some 737 MAX jets

US airlines temporarily suspended the use of more than 65 Boeing 737 MAX jets on Friday after the planemaker asked 16 carriers that operate the aircraft to address an electrical power system issue.

The US Federal Aviation Administration (FAA) said Boeing had notified it late on Thursday of its recommendation to temporarily remove some planes from service to address a manufacturing issue that could affect the operation of a backup power control unit.

Southwest Airlines removed 30 MAX airplanes from its schedule Friday, while American Airlines pulled 17 of its 41 MAX models. United Airlines removed 16 of its 30 MAX airplanes and Alaska Airlines four aircraft.

Sources briefed on the matter said the issue affects about 90 airplanes. Boeing told airline and leasing companies that the repairs could take a matter of hours or a few days, according to a notification seen by Reuters.

The FAA said it is in contact with the airlines and the manufacturer, and will ensure the issue is addressed. Boeing shares were down 1.5% in early Friday trading.

The 737 MAX returned to service in November after a 20-month safety ban triggered by two fatal crashes that killed 346 people. The plane has continued to face close scrutiny since it resumed flights.

Boeing said in a statement that it wants 16 MAX operators to check and verify that a “sufficient ground path” exists for a component of the electrical power system.

American Airlines Chief Operating Officer David Seymour said in a memo to employees seen by Reuters that Boeing has traced the issue to a production change made in the installation process.

“(This) occurred after our last aircraft was delivered before the fleet grounding in March 2019,” he said.

A Boeing spokeswoman said the issue was not related to a key safety system tied to both fatal crashes called MCAS, which had led to the wider safety grounding.

American Airlines said the issue impacts 17 of its most recently delivered airplanes.

Teal Group analyst Richard Aboulafia said it was not clear how big an impact the issue will have.

“If it’s a glitch that’s either just a false alarm or something easily checked in a day or so, it will be forgotten quickly,” he said in an email.

“But since it’s just a batch of planes, and not all MAXs, it’s probably not related to the design.” Boeing is suing a subcontractor it hired for work on new Air Force One planes used to carry the president, saying the company ran into financial problems and missed deadlines.

The aircraft maker said the subcontractor’s problems have caused millions in damages to Boeing and jeopardized work that is critically important to the U.S. Air Force and the president.

“Despite this situation we are not behind schedule and we still plan to meet the Air Force’s delivery schedule,” Boeing spokeswoman Deborah VanNierop said Friday. She said the company will find new suppliers or do the work itself.

The lawsuit was filed this week in a Texas state court in Fort Worth. GDC did not immediately return a call seeking comment.

The US Air Force awarded Boeing a $3.9 billion contract in 2018 to convert two Boeing 747-8 planes into the iconic presidential jets and deliver them by December 2024. Boeing hired GDC for work on Air Force One and other executive planes used to carry government officials.

Boeing is currently working on electrical power upgrades, communication systems, executive interiors and other work on the planes at a Boeing facility in San Antonio, Texas, VanNierop said.

The lawsuit was first reported by KXAS-TV, the NBC affiliate in the Dallas-Fort Worth area.

Airbus deliveries:  A rebound in air travel in China and the United States helped to drive a surge in March deliveries for Airbus, sending the planemaker’s shares higher. Airbus reported slightly higher deliveries for the first quarter and posted 39 gross orders, including a new deal for 20 A220s to an unidentified buyer.

But the company’s net orders - which are adjusted for cancellations - remained in negative territory for the first quarter, with a total of minus 61 net orders dominated by a Norwegian cancellation unveiled in the previous month.

The brisk pace of deliveries confirms a Reuters report on Wednesday that the world’s largest planemaker was poised to match or even eclipse the 122 deliveries seen in the first quarter of last year after a surge in March.

Airbus shares rose more than 2% early on Friday.

Both Airbus and Boeing have had to cut production and lay off thousands of people as the pandemic hit air travel, with Boeing also emerging from a safety crisis over its 737 MAX.

Several analysts said the surprise leap in March deliveries put Airbus on course to hit its full-year target of repeating the 566 aircraft supplied in 2020, a year marked by COVID-19.

Internally, the planemaker is aiming for more than 600 deliveries, suppliers say.

However, with more than 100 jets already sitting outside its factories as airlines try to save cash, Airbus once again produced more than it delivered in the first quarter.

That implies a $1 billion build-up in inventory, Stifel analyst Harry Breach said.