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Boeing warns it may stop 737 Max production

Boeing 737 Max plane

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Boeing is warning that it might have to halt production of the 737 Max if grounding continues much longer.

The company reported its largest-ever quarterly loss of $3.4bn (£2.7bn) on Wednesday due to the troubled plane.

If hurdles with regulators worldwide continue, Boeing said it would consider reducing or shutting down production of the 737 Max entirely.

However, Boeing boss Dennis Muilenburg is confident the plane will be back in the air by October.

Boeing’s entire fleet of flagship 737 Max planes were grounded in March after an Ethiopian Airlines flight crashed, killing 157 people.

Five months earlier, 189 people were killed when a Boeing 737 Max operated by Lion Air crashed.

As investigations into the two crashes continue, Boeing has been working on fixes for its Mcas anti-stall flight control software, as well as other issues identified by regulators, including the US Federal Aviation Administration.

Boeing, which is still waiting for approval from regulators, said it had held weekly technical calls with operators of the 737 Max, while the modified software had so far been tested in 225 flight simulator sessions.

Spiralling costs

After the two crashes, production of the 737 Max was reduced from 52 to 42 aircraft per month, Mr Muilenburg told investors in a conference call.

The knock-on effect of this move is that Boeing has to pay more for plane parts than before, which are priced according to the volume purchased by the planemaker.

Having to suspend deliveries of new 737 Max planes to airlines has also hit Boeing’s cash flow and profit margins.

Further reducing production of the plane would compound these problems, which could lead Boeing to halt production of the 737 Max completely – a move the company has not taken since it halted production of the 747 for 20 days in 1997, when demand outstripped supply of parts.

Boeing warns it may stop 737 Max production

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