In This Article:
Boeing (BA) is advising airlines to inspect 737 Max cabin bolts, raising minor supply concerns for the aerospace manufacturer. However, Third Bridge's Global Sector Lead for Industrials Materials and Energy Peter McNally tells Yahoo Finance Live that "the bigger issues" were crashes in prior years, so these bolts "could be a limited issue" by comparison.
With supply chain strains lingering but air travel demand booming, McNally doesn't expect much order impact for the "workhorse" 737 Max model. However, he notes "deliveries have been an issue" with backlogs and supplier constraints persisting.
Given pressures to lift output and Airbus (AIR.PA) commanding more market share, McNally says it’s difficult to see how Boeing makes "big recoveries with lost customers” post-accidents. While an attention-grabbing directive, Boeing’s larger challenges remain to restore production and reputation after years of setbacks.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
[VIDEO LOGO]
BRAD SMITH: This week, Boeing is warning airlines of a potential loose bolt on its 737 MAX planes. The aerospace company saying it might take only two hours to fix, but this comes after production issues slashed the planes delivery forecast this year. Our next guest doubts that Boeing will meet its delivery targets in 2024 and other supply issues will continue to plague the company.
For more on this, we've got Peter McNally, Third Bridge Global Sector lead, here with us on the day. Peter, it's great to speak with you. I'd love to get your insights around this. Because if you're a purchaser of Boeing 737 MAX planes-- and they have just come off of a stretch of a few months where they've seen a good amount of orders come through, both internationally and domestic airline operators too. All that considered, do you look at news like this and say ultimately, OK, that would deter us from exercising the options that they have later on down the line to take even more delivery?
PETER MCNALLY: Well, I think the bigger issues were a few years ago with the 737 Max and the accidents of the disasters that they did happen. This could be a limited issue. But look, it's a single aisle plane. They compete with Airbus' 321. And it's the workhorse for leisure travel. So it's unlikely, I think at this point, based on what we know that there's any impact on the order book or anyone exercising orders. Because it's difficult to get a plane these days as supply chains have been stretched.
And I think we've seen that post-pandemic, people really do want to travel, and they want to travel by air. And that has made it a tremendous comeback. And airlines have invested in a lot of future capacity.