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Investors Business Daily
Investors Business Daily

More Loose Fasteners Discovered On 737 Max 9s. Spirit, Boeing Stock Lower.

Shares of Boeing and Spirit AeroSystems traded mildly lower in Tuesday's premarket session, as Alaska Airlines joined United Airlines in disclosing loose fasteners discovered during 737 Max 9 inspections mandated by the Federal Aviation Administration. The FAA grounded all Boeing 737 Max 9 model aircraft on Saturday and required inspections, following a depressurization "incident" forcing an  jet into an emergency landing in Portland, Ore. on Friday. Boeing stock fell about 8% Monday. SPR shares fell 11.1%.

Alaska Airlines' scheduled flight 1282 from Portland to Ontario, Calif. on Friday had to make an unscheduled emergency landing shortly after takeoff after a mid-cabin fuselage component separated from the airliner. The flight took off after 5 p.m. PT and landed safely at 5:27 p.m. PT with all 171 passengers and six crew members. The FAA on Saturday grounded the 737 Max model and was investigating the incident which it described as a "pressurization issue."

As of 6:30 p.m. PT Sunday, Alaska Airlines canceled 170 Sunday flights and canceled 60 flights for Monday, "with more expected," according to a statement from the airline. United Airlines, which operates 79 737 Max-9 aircraft in its fleet, canceled about 270 flights across Saturday and Sunday, according to reports from FlightGlobal. The airline suspended 737 Max 9 flights during the FAA inspection process. United said Sunday it was able to save another 145 flights by "switching to other aircraft types."

Incident Investigation

The blown out body panel was located in the backyard of a Portland area residence, aiding the investigation. Chair of the National Transportation Safety Board Jennifer Homendy said in a Sunday news conference the aircraft involved in the incident had experienced multiple warnings on previous flights from its auto-pressurization fail light.

Those warnings may or may not be related to Friday's event. But they had been enough to lead Alaska Airlines to restrict the jet from flying to Hawaii, in the event that it might require an emergency landing.

The Alaska Airlines jet involved in Friday's incident was among the company's newest, after entering service in November, according to Flightradar24. The aircraft had logged 145 flights.

The grounding order affected 171 aircraft according to the FAA and requires inspections that will take four to eight hours per aircraft. An Emergency Airworthiness Directive would be issued related to the National Transportation and Safety Board's investigation into Alaska Airlines Flight 1282, the release said.

United, Alaska Report Loose Parts

On Monday, United Airlines reported finding looses bolts and other parts during its inspections of 737 Max 9 door plugs. Air service website The Air Current said the problem items were found on five aircraft.

Alaska Airlines late Monday said it had not begun the formal inspection process. But it reported late Monday that preliminary inspections had found "installation issues" in the door panel. Those included  "bolts that needed additional tightening."

The MAX-9 is the second largest of the four-model 737 MAX series. It includes an auxiliary fuel tank to keep its 3,550-nautical-mile range competitive with the smaller Max 8 model. Boeing prescribes a seating capacity of 178 to 193 passengers for the Max 9 jets.

The two Boeing jets that crashed and killed hundreds in Indonesia and Ethiopia in 2018 and 2019 were 737 Max 8 model aircraft. Those crashes were found to be partly due to software issues in the planes, with governments around the world grounding the aircraft until Boeing addressed the problems.

Supplier Struggles

Boeing supplier Spirit manufactures the fuselage and cockpit in all Boeing jets. It also makes the fuselage for the 737 Max models, the Seattle Times reported.

In October, Boeing agreed to supply millions of dollars to support its struggling parts supplier. Earlier this summer, Boeing discovered Spirit improperly drilled holes in the 737 Max fuselage components that help maintain cabin pressure, which affected its delivery schedule. The defect was the latest in production slowdowns after Spirit's machinists union went on strike in late June.

For the latest incident, the "rear mid-cabin exit-door assembly separated" from the airliner, according to air traffic news site LiteRadar24. Meanwhile, the Seattle Times reported that the rectangular hole in the fuselage "appeared where Boeing fits a plug to seal a door opening that is not used by most airlines."

Boeing Stock, Airlines React

SPR stock tumbled nearly 13% early Monday. Shares pared losses midday Monday, then closed with an 11.1% loss after the United news broke.

Boeing stock fell 8.3% Monday morning, dropping out of a buy zone for a cup base. BA stock broke out from the 18-week pattern on Dec. 8. After paring its losses, Monday's United news sent Boeing shares back to an 8% loss.

Boeing shares traded down 0.6% ahead of Tuesday's open. SPR stock was off 0.4%. Alaska Airlines stock dropped 1.5%, despite an price target hike to 50, from 42, maintaining a buy rating, from  Bank of America.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison

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