CHICAGO/SEATTLE (Reuters) - Boeing Co plans to cut its monthly 737 aircraft production by nearly 20 percent as it works to manage the grounding of its MAX aircraft in the wake of two deadly crashes, Chief Executive Officer Dennis Muilenburg said on Friday.
Deliveries of Boeing’s best-selling aircraft were frozen after a global grounding of the narrowbody model following the crash of an Ethiopian Airlines jet on March 10.
Starting mid-April, production will be cut to 42 airplanes per month from 52, the company said in a statement.
Muilenburg said the company now knows that a chain of events caused a Lion Air crash in Indonesia last October and the Ethiopia disaster, with erroneous activation of so-called MCAS anti-stall software “a common link” between the two.
Boeing said it continues to make progress on a 737 MAX software update to prevent “accidents like these from ever happening again,” he said.
Boeing had been planning to speed up production again in June to 57 a month.
Shares in Boeing Co fell around one percent after the market closed on Friday.
The 737 MAX is banned from flying in most countries across the world following the Ethiopia crash that killed all 157 people on board.
Boeing faces logistical issues in finding places to park the growing number of grounded 737 MAX planes as well as being responsible for all their maintenance costs since it has been unable to deliver the jets to customers, two people briefed on the situation said.
Manufacturers avoid halting and then resuming production as this disrupts supply chains
