The Federal Aviation Administration on Wednesday declared Boeing's (NYSE:BA) 737 MAX safe to fly, authorizing the plane to return to service 20 months after it was grounded following a pair of fatal accidents.
The decision, though expected, is a major milestone for Boeing. The company has bled through more than $15 billion in cash in 2020 in part because of expenses related to storing the planes and keeping suppliers afloat.
The 737 MAX was pulled from service worldwide in March 2019 days after an Ethiopian Air crash that appeared similar to an October 2018 Lion Air crash. Investigators eventually blamed a Boeing software system designed to keep the aircraft level, and recommended a series of changes.
With the FAA signing off on the changes, Boeing should get the all-clear from regulators in Europe, Canada, and elsewhere shortly. It's less certain when China, which accounts for a significant portion of the 737 MAX order book, will reauthorize the plane.
Boeing can now begin to try to place the more than 400 airframes it has built but was unable to deliver during the grounding, which should help boost free cash flow. But the company is selling into a tepid market, with airlines cutting back expansion plans due to the coronavirus pandemic.
Getting the 737 MAX flying again is the first step in Boeing's recovery plan, but the process is still likely to take years as airlines work to rebuild their balance sheets post-pandemic.