Boeing halts test flights of new plane over engine issue

A Boeing 737 MAX sits outside the hangar during a media tour of the Boeing 737 MAX at the Boeing plant in Renton Washingt

A Boeing 737 MAX sits outside the hangar during a media tour of the Boeing 737 MAX at the Boeing plant in Renton Washingt

Boeing has suspended test flights of the 737 MAX after a problem was discovered in a CFM LEAP-1B engine component.

Boeing was expected to begin deliveries of the new aircraft within days to its first expected customer, Norwegian Air Shuttle, though Southwest Airlines Co (NYSE:LUV) is expected to take delivery in July.

Boeing said the MAX 9 will form the backbone of Primera Air's fleet, joining more than 3,700 MAX orders from 87 customers that it has accumulated to date.

Boeing fell 1.2 percent to $183.18 at the close in NY, the second-biggest decline on the Dow Jones Industrial Average, after adjusting for the beginning of trading without the right to a dividend.

The issue arose late last week when Safran found a quality problem in a large metal disc used in the low-pressure turbine at the rear of the engine, said Jamie Jewell, a spokesman for the engine maker, CFM International.

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The MAX has replaced Boeing's previous 737 models and is considered much more fuel-efficient, and has been a to-most seller for aerospace giant.

Production of the jets is also set to continue. Boeing has several unaffected engines available that it could swap to avoid lengthy delays on initial deliveries, Alder said. Boeing had said the first of the Max 737 planes would be delivered to SpiceJet in 2018.

Boeing stated that the LEAP-1B engines were thoroughly inspected throughout more than 2,000 hours of testing, during which time the company did not experience any problems.

Cai von Rumohr, an analyst with Cowen and Co., said "this doesn't look like a serious concern" because Boeing still expects to deliver the first plane this month and it appears to be a fixable manufacturing problem rather than a design flaw. A LEAP-1A model made for Airbus A320neo jets is not affected, Andries said.

The 737 MAX has not entered service. Primera Air plans to use the MAX 9's auxiliary fuel tanks to lower trip costs and maximize the range to accommodate flights connecting Europe to the east coast of the U.S. The company said then the program was on track, with delivery of the first planes scheduled for next year.

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