Boeing shares have fallen sharply after the company admitted it could be July until the 737 MAX fleet – grounded globally after two crashes – may be cleared to fly again.
The news, first reported by Sky’s sister business channel CNBC, prompted a 5% decline in the company’s stock before trading in the shares was briefly suspended ahead of the official announcement.
Boeing had hoped that the US aviation regulator would sign off within weeks updates to crucial flight control software that were demanded after 346 people died in the accidents – giving airlines time to train pilots ahead of the peak summer travel season.
All 737 MAX aircraft have been unable to fly since March last year when an Ethiopian Airlines plane came down outside Addis Ababa following a Lion Air crash in October 2018.
Modifications have mainly focused on an anti-stall device – the Manoeuvring Characteristics Augmentation System (MCAS) – deemed responsible for both accidents.
Boeing has made the software less powerful but it is still working on changes to flight-control computers and pilot-training requirements, ending its resistance a fortnight ago to full simulator training for pilots.
It is understood the Federal Aviation Administration (FAA) has led greater demands on the company, which previously announced plans to suspend production of the planes pending regulatory approval for the aircraft.
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Completed orders, which are awaiting delivery to airlines worldwide, have been stacked at several sites, with Ryanair among Boeing customers demanding compensation.
They blame Boeing’s woes for curtailing routes and growth plans.
The company’s confirmation of a further delay risks the prospect of a further downgrade to Ryanair’s ambitions, which have slipped several times since it was first told there would be a delay in securing its first orders of the more fuel-efficient aircraft.
Boeing suppliers have also been cutting jobs.
The crisis has cost Boeing, the largest exporter in the US, at least $9bn (£6.9bn) to date, though that figure is expected to be sharply upgraded when the company reports its full-year results at the end of the month.
It has been attempting to raise more money from its lenders to ease the financial burden and could yet, market experts suggest, go cap in hand to its investors.
Boeing, publicly at least, had expected the FAA and its European counterpart to declare the fleet safe during the first quarter of the year up until Tuesday’s announcement.
While it is resigned to the fact that it is a decision for the regulators, it has insisted the priority is the safety of passengers.
SOURCE : https://news.sky.com/story/boeing-admits-crisis-hit-737-max-may-not-return-until-july-11914518