Boeing (BA) has pushed back the delivery of yet another variant of its ultra-long-range 777X jets, Reuters reported on August 14.

On Wednesday, the company revealed that it had put a hold on the development of the 777-8 model aircraft. The move came in the wake of ongoing troubles with its 737 MAX planes and issues with engines installed in the 777X models.

Boeing Delays Delivery of Another 777X Variant Aircraft

What’s causing the Boeing 777X delay?

Boeing revealed in June that the 777X program was facing challenges due to problems with GE9X engines. The engines, which General Electric (GE) manufactures, seem to have some operational issues.

The GE9X engine is one of the main highlights of the 777X series aircraft. According to General Electric, GE9X will be the company’s most fuel-efficient engine in its history. The engine will be 10% more economical than the GE90 engine installed in other 777 model planes. Overall, it will reduce fuel consumption by 5% when fitted into wider-body jets.

The engine features the largest-ever fan build by General Electric, with just 16 fan blades—the lowest among any other wide-body engine in service globally. GE9X is also expected to provide passengers with a quieter ride, as it comes within Stage 5 noise limits.

The company is already facing a worldwide ban on its fast-selling narrow-body single-aisle 737 MAX planes. The ban is hurting Boeing’s overall commercial aircraft deliveries, as airlines have denied taking shipments until the safety concerns are cleared. The company recently reported a 38% year-over-year fall in commercial airplane shipments.

Uncertainty over MAX’s return to service still looms. Therefore, Boeing doesn’t want to take any risks with other model planes. Any mishap with another model jet would tarnish its image and customers’ and passengers’ faith in its airplanes.

Boeing 777X program

Boeing launched the long-range wide-body twin-aisle engine 777X program in late 2013. The engine comes in two variants: the 777-8 and the 777-9 models. The 777-8 is a smaller follow-on model of the 777-9 passenger jet. The model has a seating capacity of 365 passengers. The 777-9 model has a capacity of 414 passengers.

The 777-8 aircraft were planned to initially commence service by 2022, following the first flight of the 777-9 variant in late 2019. However, in June, Boeing pushed the first flight of the 777-9 back to 2020 due to issues with the GE9X engine.

The delay in delivery of the 777-8 will affect various airline operators’ expansion plans. Currently, Boeing has received over 50 jet orders for 777-8 planes from companies such as Qantas Airways, Qatar Airways, Etihad Airways, and Emirates.

Australian-based Qantas Airways previously anticipated that it would receive the first 777-8 plane in 2022, according to Reuters. The company intends to start a 21-hour nonstop commercial 777-8 flight between Sydney and London in 2023. However, the latest development halt for the aircraft could jeopardize this plan.

Stock performance

Boeing stock has been on a downward trajectory since the Ethiopian Airlines crash on March 10. The stock has lost over 24% of its market value since the mishap. YTD (year-to-date), the stock is now down nearly 1% as of August 14. Its YTD decline stands in contrast to its YTD gain of about 31% before the crash.

Boeing stock has underperformed the iShares U.S. Aerospace & Defense ETF (ITA) as well as its peers. ITA invests in companies that manufacture, assemble, and distribute aerospace and defense equipment. The ETF is up 20.7% YTD. Shares of Boeing’s peers Lockheed Martin and Northrop Grumman have gained 40.9% and 47.6%, respectively.

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