Why this Boeing investor says now is a good time to get into the name

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    CNBC’s “Halftime Report” team discusses Boeing’s stock as the company says some new 737 Max jets have potential electrical issues. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

    U.S. airlines temporarily grounded more than 60 Boeing 737 MAX jets on Friday after the U.S. planemaker asked 16 carriers who operate the jet to address an electrical power system issue in the aircraft.

    The U.S. Federal Aviation Administration (FAA) said Boeing had notified the agency late Thursday of its recommendation to temporarily remove some planes from service to address a manufacturing issue that could affect the operation of a backup power control unit.

    The FAA added it is in contact with the airlines and the manufacturer, and will ensure the issue is addressed.

    The 737 MAX returned to service in November after a 20-month safety ban triggered by two fatal crashes that killed 346 people. The plane has continued to face careful scrutiny since it resumed flights.

    Southwest Airlines removed 30 MAX airplanes from its schedule Friday, while American Airlines removed 17 of its 41 MAX airplanes and United Airlines removed 16 of its 30 MAX airplanes.

    Boeing said in a statement that it wants 16 MAX operators to check and verify that “a sufficient ground path exists for a component of the electrical power system”.

    American Airlines Chief Operating Officer David Seymour said in a memo to employees seen by Reuters that Boeing “has traced the issue to a production change made in the installation process that occurred after our last aircraft was delivered before the fleet grounding in March 2019.”

    Airlines said they did not have an immediate timetable for when the planes could return to service. American said the issue impacts 17 of its most recently delivered airplanes.

    A Boeing spokeswoman said the issue was not related to a key safety system tied to both fatal crashes called MCAS, which had led to the wider safety grounding.

    “We are also informing our customers of specific tail numbers affected, and we will provide direction on appropriate corrective actions,” Boeing said in a statement.

    Southwest Airlines said 30 of its 58 737 MAX 8 aircraft were affected by Boeing’s notification, but that it is currently only flying up to 15 MAX airplanes per day.

    Teal Group analyst Richard Aboulafia said it was not clear how big an impact the issue will have.

    “If it’s a glitch that’s either just a false alarm or something easily checked in a day or so, it will be forgotten quickly,” he said in an email.

    “But since it’s just a batch of planes, and not all MAXs, it’s probably not related to the design.”

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    In This Story: Boeing

    The Boeing Company (LON: BOE) is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product support services.

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