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Boeing halts test flights of 737 MAX aircraft

11 May 2017

Boeing had temporarily halted test flights of its new 737 MAX aircraft due to possible issues with the engine.

The stoppage comes only days ahead of the US plane maker's first scheduled delivery of the aircraft to a customer.

However, Boeing said it was going ahead with plans to begin MAX deliveries this month, adding that production of the jets would continue.

American Airlines, Southwest, and China's Shandong Airlines were among those that had placed orders.

Earlier this year India's SpiceJet placed an order for 205 new planes from Boeing, in a deal valued around $22 billion.

Under the deal the first of the Max 737 planes would be delivered to SpiceJet in 2018.

The MAX fleet was designed to be a more fuel-efficient version and replaced Boeing's previous 737 model which had been a best-seller for the aerospace giant.

Boeing said it was notified last week of a potential issue involving turbine engine discs manufactured by a supplier to CFM International, a GE and France-based Safran joint venture, which makes engines for the 737 Max fleet.

According to Boeing, it had not experienced any problems with the discs during over 2,000 hours of testing.

Boeing shares were down 1.3 per cent to $183.15 in afternoon trading on the New York Stock Exchange, while GE shares were down 0.9 per cent at $28.67.

The 737 MAX will replace the earlier version of Boeing's best-selling single-aisle aircraft, the 737, which had been a moneyspinner for the aerospace company.

The 737 MAX 8, the first version of the plane to be built, seats 162 passengers and carries a list price of $110 million but airlines typically receive steep discounts.

Delayed deliveries are likely to cause a build up in Boeing's inventory, "as planes essentially sit waiting for engines," analyst Rob Stallard of Vertical Research Partners told Bloomberg.

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