Will The Recent Boeing 777X Setback Hurt Airline Industry?

There seems to be no end to Boeing’s (NYSE:BA) miseries as its commercial business line took a strong hit, this time from its wide-body jet program, 777X. Notably, a cargo door of a 777X model exploded during a structural test performed on the ground last week, thereby further delaying the fleet’s delivery schedule.

This unprecedented incident is a big blow for Boeing, which has been in a tough spot since the grounding of its 737 Max in March. Airline companies, which were to add the 777X model in their fleet, are also likely to suffer.

Details on 777X Setback

The recent explosion in 777X’s cargo door has forced Boeing to suspend the structural load tests of this jet family. As a result of this flight-testing failure, Boeing will have to get the door replaced and repeat the final stages of the test, thus leading to a further delay in deliveries of 777X jets.

Notably, in June, the 777X program was hurt by durability issues associated with General Electric (NYSE:GE) GE9X engine’s high-pressure compressor. This eventually delayed engine certification for 777X, pushing 777X scheduled first flight to 2020.

Airline Companies Likely to be Affected

Some of the major airliners across the globe have been regular customers of Boeing's varied aircraft programs. The newest addition to its twin-isle jet portfolio is 777X, which will see Boeing’s latest technologies being implemented on its renowned 777 aircraft, including folding wingtips. Some of the major airline companies that have already placed orders for 777X include Emirates, Etihad Airways, Cathay Pacific (OTC:CPCAY) , Singapore Airlines, All Nippon Airways, among others.

Per a report by Simple Flying, a total of 344 aircraft of the 777X were on order, toward the end of August, with the most recent order coming from British Airways. Lufthansa, with 20 777-9X aircraft on order, was supposed to be the first airline company to fly the Boeing 777X. However, this, in all certainty, will get delayed due to the recent failure of the aircraft’s test program. Such lengthy delays will eventually postpone aircraft deliveries, which, in turn, can hurt operations of the aforementioned airline companies.

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Cathay Pacific Airways Ltd. (CPCAY): Free Stock Analysis Report

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General Electric Company (GE): Free Stock Analysis Report

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