Boeing stock retreated Tuesday after the Dow Jones manufacturer halted test flights due to a faulty part — this time with its 777X aircraft. Elsewhere, Hawaiian Holdings soared after clearing an obstacle in its merger with Alaska Airlines.
Boeing on Monday suspended flights for its 777X test fleet after discovering damage to an engine-mounting structure, according to reports. The company found cracks in a custom structural component for one of its 777-9 models in its test fleet, connecting the wing to a GE Aerospace-made engine. The issue was discovered following a five-hour test flight in which the component "didn't perform as designed," Aviation Week reported.
Boeing also grounded the other three aircraft in the test fleet as it performs inspections. "Our team is replacing the part and capturing any learnings from the component and will resume flight testing when ready," the Dow Jones manufacturer said. The company is also keeping the FAA updated throughout the process.
The component failure comes as Boeing was undergoing the first phase of type inspection authorization (TIA) for the 777-9, which the FAA requires for certification. TIA tests began July 12 after nearly a three-year delay and mark the last major milestone before FAA approval and initial deliveries, according to Aviation Week.
RBC Capital analyst Ken Herbert on Monday noted the grounding could potentially push 777X delivery expectations into 2026, Bloomberg reported. Herbert predicts the 777X program would likely encounter a "prolonged approval period."
Boeing initially expected deliveries to begin in 2025. GE Aerospace said there was no issue with its engine, the GE9X turbofan, Bloomberg reported.
Alaska Airlines-Hawaiian Merger
Elsewhere, Alaska Airlines on Monday said its proposed merger with Hawaiian Airlines cleared a major regulatory obstacle with the U.S. Department of Justice.
Alaska Air Group, parent of Alaska Airlines, announced plans to acquire Hawaiian Airlines for $1.9 billion in December.
The DOJ's period to complete its regulatory investigation of the merger expired Monday.
The proposed combination still remains subject to other customary closing conditions and requires approval from the U.S. Department of Transportation.
Boeing Stock And Airlines Climb
Hawaiian Holdings stock leapt 11.3% Tuesday. HA stock is extended above a buy zone after breaking out above a 14.89 buy point on Aug. 14.
HA shares are up 24.5% this year.
ALK stock ticked up slightly Tuesday after climbing around 2% premarket. Shares have been posting tight weekly closes, just above early August lows. Alaska Airlines has so far carved 10.5% lower in 2024.
Boeing stock slid 4.2% Tuesday, dropping back below its 50-day moving average.
BA stock tumbled nearly 34% this year amid quality control issues and in-flight malfunctions.
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