Spirit AeroSystems has resumed shipping compliant 737 MAX fuselages to Boeing and expects to have repaired fuselage fittings on all affected units in its inventory by the end of July, the supplier’s top executive said.

“We have identified the affected units located in Wichita, including units in [Spirit’s factory] as well as Boeing-owned inventory units in Wichita and have developed a repair,” Spirit CEO Tom Gentile said on a May 3 earnings call. “We have completed repair on four [Boeing inventory] units and our current assessment is that the repair work will be complete for units in Wichita by the end of July.”

The non-conformance, revealed April 13, affects two of eight fittings that connect the rear fuselage and the vertical fin on 737-7s, 737-8s, 737-8200s and P-8s. The issue dates back to 2019, but not all units in the affected variants have the problem, which the Wall Street Journal reported is related to the amount of force used during the fittings’ installation.

For each aircraft in Boeing’s inventory and subassemblies not yet in Boeing’s hands, all non-compliant fittings must be repaired before the FAA will sign off on delivery. Gentile said there are 65 units in Wichita awaiting shipment to Boeing, including 35 earmarked for operators not taking deliveries—mostly Chinese customers. Of the remaining 30, 19 require repairs.

Spirit has another 19 units in some state of production that require repair, Gentile said. Work has started on the first four, and all are expected to be complete by the end of July.

Boeing estimates that 75% of the 225 737 MAXs in the company’s undelivered inventory must be repaired. Several more on the production line also are affected.

While the repair is the same for all affected parts, the process for already assembled aircraft is more time consuming. The vertical fin must be removed and affected systems moved to allow access to the fittings. The fixes take “days” in instances on unassembled aircraft, Boeing CFO Brian West said on a recent earnings call, while repairs to already completed aircraft are “more complicated.” He did not provide more details.

The in-service fleet will be managed differently. While details are still being finalized, the affected fleet—aircraft identified as having the non-conforming fittings—are likely to undergo periodic inspections. Fittings will be replaced only if defects, such as cracks, are found.

“The disposition hasn’t been determined yet,” Gentile said. “It’s likely to involve inspections in the field and the frequency is not known yet. And then [following] the inspection, if there is a defect observed, then there would be a replacement.”

Boeing has not released details on the size of the affected in-service fleet but estimates that it is about 500 airframes. Boeing has delivered about 715 aircraft in the affected variants since the beginning of 2019, Aviation Week Network’s Fleet Discovery data shows.

Gentile put the per-aircraft cost at $100,000-$150,000 for the simple repair. The company does not know the full extent of the repair costs, including stored and in-service fleet. Spirit said the issue will cost it at least $31 million in full-year gross profits. “However, the company cannot reasonably estimate the remaining potential costs at this time,” it added.

The rework and factory floor disruptions will likely reduce Spirit’s full-year 737 shipset output. It started the year with a target of 420 shipsets, but that has been revised to 390-420.

“The disruption of rework that will take place in Wichita will reduce near-term 737 production by about 30 to 40 units, leading the full year 737 deliveries of about 390 with the potential to make up additional units in the back half of the year,” CFO Mark Suchinski said. Spirit delivered 95 in the first quarter.

The new target reflects planned 737 production-rate increases to 38 shipsets per month in August and 42 in October as part of supporting Boeing’s ramp-up plan. Spirit’s suppliers have been delivering at a pace slightly above Boeing’s notional current rate of 31 aircraft per month.

“Because we want to make sure that we continue to be prepared for the rate break at 38, we continue to receive parts from our supply base at 31.5 a month,” Suchinski said. 

“We are still planning to do the production rate increase in August to 38 [and] in October to 42 aircraft per month,” Gentile added. “We have the headcount in place for 42 aircraft per month. A lot of them are getting trained and [acquiring] on the job experience so that we can hit those production rates throughout the rest of this year.”