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Thursday, March 28, 2024

Boeing Tumbles After Admitting More Delays On 737 MAX, FAA Says “No Timeframe” For Return

Courtesy of Zero Hedge. View original post here.

Update (1440ET): The FAA has issued a statement somewhat rejecting Boeing’s timeline, suggesting there is no timeframe for the return of the 737 MAX, reiterating that safety is the first priority.

“The agency is following a thorough, deliberate process to verify that all proposed modifications to the Boeing 737 MAX meet the highest certification standards…

We have set no timeframe for when the work will be completed.”

*  *  *

Update (1430ET): Boeing shares are halted (down 5.5%) pending news.

Boeing issued the following statement on 737 MAX Return to Service

As we have emphasized, the FAA and other global regulators will determine when the 737 MAX returns to service. However, in order to help our customers and suppliers plan their operations, we periodically provide them with our best estimate of when regulators will begin to authorize the ungrounding of the 737 MAX. We are informing our customers and suppliers that we are currently estimating that the ungrounding of the 737 MAX will begin during mid-2020. This updated estimate is informed by our experience to date with the certification process.

It is subject to our ongoing attempts to address known schedule risks and further developments that may arise in connection with the certification process. It also accounts for the rigorous scrutiny that regulatory authorities are rightly applying at every step of their review of the 737 MAX’s flight control system and the Joint Operations Evaluation Board process which determines pilot training requirements.

Returning the MAX safely to service is our number one priority, and we are confident that will happen. We acknowledge and regret the continued difficulties that the grounding of the 737 MAX has presented to our customers, our regulators, our suppliers, and the flying public. We will provide additional information about our efforts to safely return the 737 MAX to service in connection with our quarterly financial disclosures next week.

*  *  *

Boeing shares are down around 4% after reports from CNBC  indicate that the 737 MAX sign off won’t happen until July.

CNBC cites people familiar with the matter said on Tuesday and notes that this new date is months later than the manufacturer previously expected.

This does not bode well for the company’s imminent bond issuance ( as it tries to shore up its financing to see it through the delayed approval process and rising costs stemming from the crisis).

Shares broke below the key $320 level…

Tumbling to their lowest point since Jan. 3, 2019. 

Boeing shares could be headed down to a long term trend line if the 300 level is breached. 

As a reminder, BofA recently opined:

“we are increasingly fielding concerns from investors regarding the likelihood that the Boeing 737 MAX never returns to service.”

That question may be more critical than ever

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