GILLIAN RICH 04:11 PM ET 12/20/2019
Boeing 737 Max suppliers
Spirit AeroSystems (
SPR) and
General Electric (
GE) are adjusting their production, and
United Airlines (
UAL) canceled 737 Max flights to the start of summer as the grounding drags on longer.
Boeing (
BA) stock fell.
"This suspension will have an adverse impact on Spirit's business, financial condition, results of operations, and cash flows," said Spirit AeroSystems, which gets about 50% of its revenue from the Boeing 737 Max.
Meanwhile, engine supplier
General Electric will boost production of its Leap 1A for
Airbus (
EADSY) to help offset lost sales to Boeing during the 737 Max production halt, according to the Wall Street Journal.
Also Friday, United Airlines extended 737 Max cancellations to June, meaning the plane may risk missing another summer travel season.
American Airlines (
AAL) and
Southwest Airlines (
LUV) have canceled flights through April.
Late Thursday, S&P Global Ratings cut its score by one notch to A- with a "developing" outlook, citing uncertainty over the Boeing 737 Max's return to service, the production halt's supply-chain risks, and the potential long-term damage to the plane's competitiveness.
S&P also downgraded its assessment of Boeing's management to fair from satisfactory.
Late Wednesday, Moody's cut Boeing's debt one notch to A3 while giving it a stable outlook, saying the recently announced production halt will mean Boeing will have to provide additional financial support to many suppliers, increase risk in the production system, and boost customers' claims for compensation, which will lower 737 margins and cash generation "for years to come."
"Moreover, Moody's considers that Boeing's reputation can be adversely affected as the grounding extends and from its governance missteps with broadening social considerations related therefrom, which could have a more lasting impact on the company's business," Moody's added.
Shares fell 1.65% to finish at 328.00 on the
stock market today. Boeing stock remains below its 50- and 200-day lines, according to
MarketSmith analysis. Spirit AeroSystems lost 1%, while GE ended flat.