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Boeing cuts 737 output after plane disasters

April 6, 2019

Boeing has announced plans to cut its monthly production of 737 planes by nearly 20 percent following two deadly crashes. A problem with the model's anti-stall system is believed to be partly to blame for the disasters.

Boeing 737 MAX planes parked at the Boeing factory in Renton, Washington
Image: Reuters/L. Wesson

Crisis-hit plane-maker Boeing said in a statement it would cut down monthly production from 52 aircraft to 42, starting in mid-April.

The decision comes after regulators worldwide grounded the company's 737 MAX planes in the wake of last month's Ethiopian Airlines crash, which left 157 people dead. That accident followed a similar Lion Air jet crash in Indonesia last October that killed all 189 people on board.

Preliminary investigations into both disasters showed faulty sensor readings appeared to have erroneously activated an anti-stall system that pushed the aircraft's nose downwards.

Boeing's statement said the company would focus its attention on fixing flight-control software to prevent future incidents. It also announced it would create a special committee to review airplane design and development and "recommend improvements to our policies and procedures."

Read moreWhy do airplanes stall and why is it so dangerous?

Financial fallout

Boeing CEO Dennis Muilenburg described the production cut as temporary and said the company would work to limit the financial impact of the shift. He added that jobs would not be reduced.

All 370 of Boeing's 737 MAX 8 planes have been grounded since mid-March, but the company still has a backlog of about 4,600 unfilled orders.

The Chicago-based plane-maker is struggling to find space to park its jets, since it is still manufacturing aircraft but cannot distribute them to clients. Analysts say this drop in deliveries could also cause a significant dent in Boeing's cash flow because most of the payment for a plane is only received upon delivery.

Read moreBoeing 737 MAX: Is the new airplane safe?

Indonesia's Garuda Airlines has said it will cancel an order for 49 MAX jets. Lion Air, whose MAX 8 crashed in Indonesia, has suggested it might follow suit.

Boeing's shares fell 2.3 percent on Friday after the cuts to output were announced.

nm/tj (Reuters, AP, AFP)

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