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Top European Aviation Regulator Gives 737 MAX Green Light

By Lou Whiteman – Updated Oct 16, 2020 at 10:47AM

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It seems likely the plane will soon be cleared to fly again.

European safety regulators are ready to clear Boeing's (BA 1.22%) 737 MAX for takeoff, a key milestone in the aerospace company's effort to get its most important product airborne again.

The 737 MAX has been grounded since March 2019 after a pair of fatal accidents. The plane accounts for about 75% of Boeing's total order book, and the company bled through nearly $10 billion in the first half of 2020 due in large part to expenditures related to the 737 MAX.

Boeing's 737 Max in flight.

Image source: Boeing.

Boeing has spent the last year-plus modifying the plane's operating software to try to prevent further crashes, and both U.S. and international regulators have completed test flights to evaluate the changes.

Patrick Ky, executive director of the European Union Aviation Safety Agency, said in an interview Friday that he's satisfied with the changes Boeing has made and that his agency is performing final document reviews ahead of drafting an airworthiness directive next month.

"Our analysis is showing that this is safe, and the level of safety reached is high enough for us," Ky said in an interview with Bloomberg.

The Europeans are expected to allow the 737 MAX to return to service even before Boeing debuts software that will add redundancy to the sensors that failed in the fatal crashes.

The comments have added significance because European regulators have been in close contact with the U.S. Federal Aviation Administration on the MAX, and it is unlikely they would be moving forward if there were issues in the U.S. review. The FAA has telegraphed that it is nearing the end of its review, with agency head Steve Dickson late last month telling reporters "we're in the homestretch" after performing a test flight.

But even after recertification, Boeing faces a difficult battle. Airlines are cutting costs and slowing growth plans due to the coronavirus pandemic, meaning it could take a year or more to clear out the glut of more than 400 MAX planes it has built but has not been able to deliver during the grounding.

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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