Certification of Boeing 737 Max May Be Delayed

Boeing must achieve regulatory approval for the Max 10 and the slightly smaller variant—the Max 7—no later than December to meet its delivery deadlines.

The clock is running out for the Boeing Company (NYSE: BA) to meet its deadline for regulatory approval for the latest versions of the 737 Max. According to Reuters, Boeing must achieve regulatory approval for the Max 10 and the slightly smaller variant—the Max 7—no later than December to meet its delivery deadlines.

The process is delayed in part by new cockpit-alerting requirements that are part of certification reform legislation that was passed in 2020 after two 737 Max accidents—one in Indonesia, the other in Ethiopia—that killed 346 people. In the aftermath, the global fleet of Boeing 737 Max jets were grounded for two years while Boeing, the NTSB, and the FAA conducted investigations. 

The accidents were blamed on issues with the 737 Max and its maneuvering characteristics augmentation system (MCAS). According to a congressional investigation, both crashes were attributed to “the plane-maker’s unwillingness to share technical details.” Changes were made to the MCAS software and new training protocols were developed. The aircraft returned to service in November 2020.

Last month Boeing agreed to pay penalties of $200 million as part of a settlement to resolve charges by the Securities and Exchange Commission that Boeing “put profits over people” by misleading investors about the 737 Max and its MCAS. Boeing’s former CEO Dennis Muilenburg agreed to pay a penalty of $1 million.

News of the settlement came a year and a half after Boeing agreed to a $2.5 billion settlement with the Justice Department to resolve charges that the company’s employees had misled the FAA. The settlement included a fine of $244 million and approximately $2.3 billion in compensation to airline customers and families of the victims.

These issues are on the radar as Boeing strives to have the latest variants of the Max certified, as granted by the FAA. As noted by Reuters, last month the FAA sent a letter to Boeing expressing concerns that the aerospace giant would not be able achieve certification for the Max 7 this year, which in turn would delay approval of the Max 10. Boeing must complete a laundry list of assessments that will be documented and reviewed by the FAA before certification can take place.

“With regard to the 737-10, Boeing’s current project plan timeline has the 737-10 receiving an amended type certificate no sooner than summer 2023,” two sources quoted acting FAA Administrator Billy Nolen as saying in a letter to Sen. Roger Wicker, the top Republican on the Senate Commerce Committee.

Reuters noted the FAA, Boeing, and Wicker’s office declined to comment.

Boeing has several orders on the books for the Max 10 from airlines that include Delta Air Lines (NYSE: DAL) and Canada’s WestJet Group.

Last week, Sen. Wicker proposed extending the deadline for Boeing to September 2024, allegedly in hopes of attaching the proposal to an annual defense bill. It is not clear if Congress would be willing to approve the proposal.

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