Boeing shares jump after update on 737 Max progress
Boeing expects to take a step foward with the US aviation regulator in January that might pave the way for the subsequent return to commercial service of its 737 Max jet, which had been grounded this year following two fatal crashes.
The company said it was also “possible” it could resume deliveries of the jet to customers in December, but added that this was still dependent on approval and certifications from the Federal Aviation Authority and other regulators.
The update comes just days after some of the company’s biggest customers pushed back their expected start dates for recommencing commercial flights using the aircraft.
Investors nonetheless welcomed the update and lifted Boeing shares more than 5 per cent higher, putting them on course for their largest one-day jump in more than five months.
Boeing has previously indicated deliveries of its troubled jet could resume later this year. For the purposes of its third-quarter results, released in October, Boeing said at time it assumed regulatory approval of the 737 Max returning to service “begins in the fourth quarter of 2019”.
The resumption of such deliveries by airline customers rests on certification and when the FAA decides to rescind the 737 Max grounding order, which has been in place since March this year following the fatal crash of Ethiopian Airlines Flight 302.
“In parallel, we are working towards final validation of the updated training requirements, which must occur before the Max returns to commercial service, and which we now expect to begin in January,” Boeing said in its statement on Monday.
The training evaluation represents the final of five milestones the company must complete with the FAA before the 737 Max can return to service. According to its November 11 statement, the company has completed only the first of the five requirements, which is a simulator evaluation and certification of the jet’s software systems.
Southwest Airlines, which operated the largest 737 Max fleet in the US, on November 8 said it expected to resume scheduled commercial flights of the aircraft on March 6 — a month later than its previous forecast.
American Airlines, which operated the second-largest US-based 737 Max fleet, acted similarly. It expects scheduled flights to resume on March 5 versus its previous prediction of January 5.
Boeing shares have been knocked about 16 per cent from a record high in March reached before the Ethiopian Airlines Flight 302 became the second 737 Max jet flight to crash within six months. Lion Air Flight 610 crashed in October 2018. A combined 346 people aboard the two flights died.
Boeing shares were up 5.1 per cent to a three-and-a-half-week high of about $368 on Monday afternoon, putting the stock on track for its largest one-day jump since June 18. Shares had been up as much as 5.3 per cent earlier.