Senior cuts costs as Boeing’s 737 Max crisis takes toll on margins

One of the Britain’s biggest plane parts manufacturers, Senior, will be forced to cut costs to cushion the fallout from Boeing’s 737 Max crisis, it emerged on Thursday.

Norwegian Air, the Nordic-based 737 Max-operator flying in the UK, also revealed a £46 million hit from the grounding of the jets today, which followed the deadly Lion Air and Ethiopian Airlines crashes.

Senior, a supplier to the 737 Max, said Boeing’s decision to cut down production would reduce aerospace margins, prompting a £1 million cut to costs and a hiring spree delay to keep profits afloat.

Lower tax rates due to tax breaks in Malaysia, where it has large operations, should also help.

Boeing has cut 737 Max production to 42 planes per month instead of 57 while it awaits regulatory approval to get the plane flying again.

The US planemaker accounts for about 11% of Senior’s revenues. A further 15% of sales comes from Spirit, which makes the Boeing fuselage, and UTC, which also warned of a 737 Max hit.