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Just as Spirit AeroSystems managed to recover profitability, it may once again be wiped away. Boeing’s top supplier suspended guidance for 2024 this morning, following latest spate of production defects impacting the American aviation giant’s MAX jets. Heightened regulatory oversight of its production plants has frozen the pace of Boeing’s 737 deliveries at less than three quarters of what it was in 2018. 

Airline executives have been speaking out on Boeing’s increasingly concerning list of issues and some are prepared to cancel orders over continual delays. This comes as labor negotiations between Boeing and its largest union are set to begin within weeks. The company’s Machinists will be requesting a 40% increase to their wages over a three year period in their new contract, a massive departure from a 1% limit on average annual increases over the past decade. Union leaders have suggested they’d be willing to strike if they cannot come to terms with Boeing.

Related Stocks: The Boeing Company (BA), Spirit AeroSystems Holdings, Inc. (SPR)

Key Boeing supplier, Spirit AeroSystems Holdings Inc., reported positive net income for the first time since 2020 in the final quarter of 2023. That signals the embattled aviation firm may have finally begun to overcome the headwinds it faced in the wake of the 737 MAX disasters of 2018-2019, which resulted in the death of 346 passengers and a much longer grounding of the jets than initially expected. However, just the company managed to get its head above water, another wave of uncertainty has swept over it.

In the wake of the latest quality control issue impacting Boeing’s jets, it is unclear whether Spirit Aero will be able to maintain profitability. As MRP noted last month, the pace of Boeing’s deliveries are expected to stagnate, just as the plane manufacturer had finally managed to pick up some steam in 2023. As such, Spirit Aero suspended financial guidance for this year, now awaiting clarity on production plans for the 737 MAX model. Following an order from US regulators last week, output rates of Boeing’s 737 planes will remain frozen at 38 per month until controls are assessed. That is almost…

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