Boeing BA shares fell roughly 3% in intraday trading today after news broke that the company may not return its 737 MAX in time for the busy holiday season. Friction between Boeing and international air safety authorities threaten a new delay of the return of their 737 MAX fleet. Regulators from the US, Europe, Brazil, and elsewhere complained that Boeing failed to provide technical details and answers to specifics about modifications in the operation of MAX flight-control computers. As a result, Boeing is now forced to resubmit briefing documents describing proposed software changes.
Airlines Push Back 737 Return Dates
Major airlines have been pushing back the dates they expect to reincorporate the Boeing 737 into their fleets. Southwest Airlines LUV reported in late July that it would not be flying the Boeing 737 until next year. United UAL and American AAL Airlines have both canceled 737 flights until December. Forcing Boeing to resubmit its briefing documents sets the company back by several weeks and diminishes any chance it had of returning by the end of the year holidays. Industry officials in Europe do not believe they will be seeing the Boeing plane return to service until January at the earliest.
European regulators will likely need more time to examine the changes made to the 737 MAX’s flight control computers and its MCAS. Misfires from the MCAS were the causes of two fatal crashes and resulted in the grounding of the airplane in mid-March. A Federal Aviation Administration spokesman said that the agency continues to follow a thorough process, not a prescribed timeline.
Airlines do not want to run the risk of counting on the plane for it to end up being hit with an additional delay. People flying during the busy holiday season don’t have much flexibility or patience for last minute changes. Southwest commented, “By proactively removing the MAX from scheduled service, we can reduce last-minute flight cancellations and unexpected disruptions to our customers’ travel plans.”
Boeing is hoping to have the 737 MAX back in the air early in their fourth quarter, but the continued friction between the company and international air safety regulators have made it difficult. Boeing has submitted, or been on the verge of submitting, three earlier versions of software fixes only to be delayed by various technical issues. Airlines are beginning to move on from the Boeing aircraft as their busy holiday traveling season is just around the corner. Continued difficulties with getting the FAA’s approval to have the plane back in the sky poses the risk of major airliners making plans without the aircraft in 2020. Boeing has seen its shares fall approximately 20% since early March, falling behind the Aerospace-Defense market.
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