United Airlines Co is extending its cancellations of Boeing 737 MAX flights unti...
Spirit’s announcement came after the U.S. Federal Aviation Administration said last week it still has nearly a dozen steps to complete before approving the jets for flight after a mid-March global safety ban in the wake of two fatal crashes that killed 346 people.The European Union Aviation Safety Agency confirmed its chief, Patrick Ky, told the Financial Times he expects to approve the 737 Max’s return to service in Europe by the end of February.
Shares of Spirit, which gets about 50% of its annual revenue from the 737 MAX, were down 0.7% in mid-day trading. The stock has lost nearly 22% in value since the Ethiopian Airlines crash in March that led to the worldwide grounding of the MAX.“This suspension will have an adverse impact on Spirit’s business, financial condition, results of operations and cash flows,” the company said, adding it would halt production in January.
The planemaker had so far shielded major MAX suppliers from a financial hit, continuing to buy parts from suppliers in order to keep the supply chain running and avoid major disruptions when the MAX returns to service. Spirit has been churning out parts for the jet at a rate of up to 52 units per month, even as Boeing cut its own production to 42 per month earlier this year.
Wichita, Kansas-based Spirit said on Friday it was evaluating “all potential actions to align its cost base with lower production levels expected in 2020”.
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