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Boeing Faces More Trouble as It Pares Back 737 MAX Parts Orders

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In yet another sign of how badly the aviation industry has been clipped by the coronavirus pandemic, Boeing  (BA) - Get Free Report on Tuesday revealed that it has asked its biggest supplier of fuselage and parts for its still-grounded 737 MAX aircraft to slash output for the third time this year.

In a regulatory filing, Spirit AeroSystems  (SPR) - Get Free Report said it had received notice from Chicago-based Boeing that it now wants fuselages for just 37 jets through the remainder of 2020 (35 shipsets already have been delivered to Boeing) down from the 125 Boeing said it wanted in May. The planemaker had initially told Spirit to deliver 216 this year.

Boeing, which restarted MAX production in May after a five-month pause, directed Spirit to halt work in early June before updating its expected demand for fuselages in the letter last week. Boeing communicated its updated plans in a letter June 19, Spirit said.

The directive adds additional uncertainty to an already cloudy outlook for the MAX, which has been grounded for more than 15 months in the wake of two deadly crashes believed to have been caused by malfunctioning software. 

It also comes as carriers continue to grapple with the Covid-19 pandemic and dramatically reduced demand for air travel, and in turn new planes - an issue that has plagued Boeing since the pandemic took hold in North America in mid-March.

Some 14,000 jets, more than half the world’s fleet, have been sitting idle in the wake of unprecedented travel restrictions and now weaker demand for air travel.

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