Boeing Co yesterday said it has cut orders to local suppliers as it had to cut back on production of 737 MAX airplanes, but orders could recover once the ban is lifted is lifted and it resumes production.
Aerospace Industrial Development Corp (AIDC, 漢翔) estimated earlier this year that it could see a revenue loss of up to NT$100 million (US$3.26 million) due to fewer orders from the US firm for its products, such as doors.
Other Taiwanese suppliers include Drewloong Precision Inc (駐龍), Gloria Material Technology Corp (榮剛) and Magnate Technology Co (晟田), according to Taishin Securities Investment Advisory Co (台新投顧).
Since the 737 MAX aircraft was grounded in March, Boeing has cut its monthly production from 52 airplanes to 42, marketing vice president Randy Tinseth told a news conference in Taipei.
The aircraft was grounded after two crashes in October last year and March.
“But the production continues. Once the aircraft returns to service, our plan is to slowly, but consistently increase the rate over time,” Tinseth said.
The company’s production system is strong, so it can accelerate the production at a later time, he said.
Tinseth reiterated that the company is hoping to receive regulatory approval for the 737 MAX to return to service this quarter, although some of its customers — including United Airlines, American Airlines Group Inc and Southwest Airlines Co — have announced that they are suspending operations of the 737 MAX until January.
“Our customers are just being conservative, as they do not want to disappoint their passengers,” Tinseth said, adding that it might take a few weeks for all the 400 grounded airplanes to return to service.
The company has been working closely with the US Federal Aviation Administration and regulators elsewhere to solve the aircraft’s problems, he added.
Once its production resumes, Boeing would need to review its supply chain and adjust its production schedule, but it is likely that orders to local suppliers would recover, Boeing regional director of communications for the Northeast Asia Kevin Yoo said.
AIDC has kept communicating with the US company and adjusted its manufacturing accordingly, general manager Ma Wan-june (馬萬鈞) said by telephone, adding that he expects the grounding to be lifted soon.
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