After a piece of a Boeing 737 Max 9 jet tore off on Jan.5, Boeing stock plunged nearly 10% that week. Then the shares sank again—more than 5%—after the Federal Aviation Administration grounded the aircraft. To date, the company’s stock had dropped more than 18% as of Monday morning.
But investors may have already priced in expectations regarding future problems with Boeing’s 737 Max planes.
The latest snafu? Boeing is now reworking 50 undelivered 737 Max jets after a supplier’s employee found two holes that may not have been drilled exactly to the jet maker’s requirements. That could delay deliveries.
“This is the only course of action given our commitment to deliver perfect airplanes every time,” Boeing’s commercial chief officer Stan Deal said in a memo to staff on Sunday reported by The Wall Street Journal. A closer look at production processes could lead to Boeing finding more flaws with its planes. And that could delay Boeing’s ability to build new ones.
There are about 200 Max 9 jets in circulation worldwide.
Boeing said last week that it wouldn’t set financial targets for the year, as it continues to focus on improving the quality of its popular plane.
Before the recent 737 Max incidents, things were going well for Boeing. In October 2023, the company suggested it would be able to increase 737 Max output from the current 38 planes a month to 50 by 2025 or so. But as of now, the company is affirming its current rate of production. For its full-year 2023 earnings, the aircraft maker reported revenue that was up 17% to nearly $78 billion, with losses narrowed by more than half.
The fresh round of scrutiny comes after Boeing 737 Max planes were grounded globally following 2019 crashes in Indonesia and Ethiopia, which killed more than 300 people. The crashes then stem from a software-design issue. After a two-year ban, the aircraft was permitted to fly again in 2021.