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FAA Issues Emergency Directive Warning of Possible Boeing 737 Engine Failures

The Federal Aviation Administration has issued an emergency airworthiness directive covering Boeing (NYSE: BA) 737 aircraft currently in storage, a fresh blow to Boeing's already troubled 737 model.

The FAA said the directive was prompted by four recent reports of single-engine shutdowns due to valves being stuck open. The regulator believes corrosion is the likely cause, and requires inspections of valves on planes not operated for seven or more consecutive days.

A 737-900ER in flight.

Image source: Boeing.

The directive covers about 2,000 U.S.-registered 737 NG and Classic aircraft currently in storage, but does not apply to Boeing's 737 Max. The Max has had its own issues, with the planes grounded since March 2019 after a pair of fatal accidents.

Airlines have grounded thousands of planes, including some 737s, because the pandemic has cut into travel demand. With the impacted planes already out of service the directive should not cause flight cancellations, but it is an added step, and expense, required before the planes are allowed to resume service.

For Boeing, the bigger risk from the directive is reputational. Negative headlines surrounding the Max have potentially bruised the 737 brand. While airlines have remained committed to flying the plane once it is recertified, it is going to take years for the 737 Max to reach the sort of sales numbers Boeing had predicted for the model.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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