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737 MAX Test Flight Reportedly Delayed

By Lou Whiteman – Apr 7, 2020 at 5:03PM

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Boeing's Puget Sound operations remain closed due to the COVID-19 pandemic.

Boeing's (BA -3.39%) goal to return its troubled 737 MAX to service by mid-year could be in jeopardy after the company has reportedly pushed back its planned test flight for regulators until May at the earliest.

The 737 MAX was grounded worldwide in March 2019 after a pair of fatal accidents involving the plane. Boeing has missed multiple self-imposed deadlines to return the plane to service but seemed confident on hitting its latest goal. But the COVID-19 coronavirus pandemic appears to have complicated matters, with the AFP News Service reporting late Tuesday that a planned test flight has been delayed until May.

The delay shouldn't come as much of a surprise, as Boeing has suspended operations at its Puget Sound commercial aviation base due to the pandemic. The company initially paused manufacturing in Washington state for two weeks but said Sunday it had extended the suspension indefinitely. The 737 MAX is assembled in Washington, and Boeing has been conducting test flights on its updated software from Seattle-area locations.

The 737 MAX in flight.

Image source: Boeing.

Shares of Boeing, which had been up by as much as 11% early in the day Tuesday, closed down 4.3% after the news broke.

But even when the plane returns to service, it is unclear that demand will be as strong as once anticipated. Airplane leasing giant Avolon last week said it was cancelling orders for 75 737 MAX planes and deferring delivery on an additional 16 airframes, due to financial weakness in the airline sector.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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