Boeing Co (NYSE:BA) shares dropped suddenly on Wednesday amid several reports saying that aerospace company has concerns over its 737 Max, and has suspended any flights using the aircraft. BA stock was off by about 3% before recovering in afternoon trading.
Bloomberg is reporting that the engine, made by General Electric Company (NYSE:GE) and Safran SA joint venture CFM International, had a manufacturing issue relating to its turbine discs. GE shares were off less than 1% in Wednesday’s trade, reacting quickly to the news, but not with much conviction.
Boeing spokesman Doug Adler said via email, “Out of an abundance of caution, we decided to temporarily suspend Max flights. The step is consistent with our priority focus on safety for all who use and fly our products.”
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. BA said it still plans on delivering sometime later this month.
According to the Puget Sound Business Journal, Norwegian has ordered 100 737 Max units, just a fraction of Boeing’s 3,400 orders for the aircraft.
The decline in BA stock wasn’t entirely driven by the 737 Max report. Shares dropped early in the morning as Boeing went ex-dividend for its $1.42 quarterly payout.
This story will be updated.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.