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Boeing 737 MAX Recertification Timeline Reportedly Slips Into October

By Lou Whiteman – Jul 21, 2020 at 3:38PM

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The company had hoped to resume deliveries during the current quarter.

Boeing (BA 1.59%) reportedly will miss its goal of having the 737 MAX recertified before the end of the current quarter as it works out procedures with the Federal Aviation Administration (FAA) prior to resuming deliveries.

The 737 MAX has been grounded since March 2019 after a pair of fatal crashes. Boeing cleared a key hurdle in getting the plane airborne again late last month when it completed three days of test flights with the FAA, but the process is still ongoing.

A Boeing 737 MAX on a tug.

Image source: Boeing.

The FAA on Tuesday said it would soon issue an airworthiness directive to detail changes made to the plane designed to avoid future crashes. The public would have 45 days to comment on proposed changes and crew procedures, at which point the regulator could proceed with final authorizations.

An unnamed source told Reuters that the FAA process is unlikely to be completed before October, meaning Boeing would miss its self-imposed goal to resume deliveries prior to Sept. 30.

A short delay is unlikely to be significant, as Boeing will likely have issues delivering the 400 planes it has built but is currently storing once it is cleared to do so. In the time since the grounding, airlines have been hit hard by the COVID-19 pandemic, which has slowed growth plans and cut demand for new aircraft.

Boeing has asked suppliers to scale back production of airplane components, suggesting the aerospace giant realizes it is going to take time to work through its inventory. But any deliveries would be a boost to free cash flow and help Boeing reverse a cash burn that hit $4.7 billion in the first quarter.

Boeing will likely provide an update during its second-quarter earnings release, scheduled for July 29.

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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