On Thursday, the airline industry was hit by fresh bad news, and stocks of companies that rely on airlines for profits are taking it on the chin on Friday. Shares of Spirit AeroSystems Holdings (NYSE: SPR) fell as much as 14% on concerns a new COVID-19 variant could push back airline growth plans and crimp demand for new planes. Spirit makes fuselages and other large pieces of planes for Boeing, its former parent, and Airbus.
More issues have come to light regarding the production process of the Boeing Co. 787 Dreamliner, threatening to keep revenue-driving deliveries of the jet halted through the remainder of the year. An internal memo from the Federal Aviation Administration last week, which was seen last week by the Seattle Times, revealed a previously unreported problem with contamination of carbon fiber composite material used on the aircraft. Also reported by the Seattle Times was the FAA assessment in the memo that a previously revealed issue with tiny, nonconforming gaps in some structural components could be present in 1,000 Dreamliners already in service.
The Boeing Co. will next year slow the pace of a defense program that means a correlating decease in fuselage production in Wichita. Boeing (NYSE: BA) has delivered Norway the country’s first P-8 Poseidon antisubmarine aircraft, but also revealed a plan to slow production of the defense jet next year from 18 to 12 to better align with international demand. The P-8 is based off the Boeing 737-800, an older variant of the 737 now dominated by the MAX program.