Boeing said Wednesday it may stop production of 737 Max jetliners if the plane isn’t cleared to fly soon. All Max jets have been grounded since March.
“Shutting down 737 Max production would have profound consequences for Boeing as well as its customers and suppliers around the world. Airlines have ordered thousands of the planes,” reports the New York Times.
It might also affect the currently robust U.S. economy.
Boeing CEO Dennis Muilenburg indicated that any shutdown of the Max’s production line would be temporary. That, he said, makes more sense for the company than cutting production below the current 42 planes per month.
The company began stockpiling the new jets in March and now has hundreds on hand, awaiting an okay from the FAA. Hundreds more already delivered to airlines are grounded around the world.
“Boeing has said it expected the Max to return to service late this year. But Boeing and regulators keep finding new problems with the model, leading to a cascading series of delays,” the Times says.
Boeing has been working on changes in Max flight-control software that was implicated in two crashes last October and in March of this year that killed almost 350 people.
“Muilenburg’s comments implied that the Federal Aviation Administration can review the company’s changes to flight-control software in one month,” reports the Associated Press. “The FAA did not immediately comment, but agency officials in the past have declined to put a timetable on their work.”
The Chicago-based Boeing Co. builds planes in Washington state and South Carolina. The grounding of the Max has already cost the company billions of dollars, with more losses sure to come.
“Boeing reported Wednesday that it suffered a second-quarter loss of nearly $3 billion as it absorbed financial damage caused by the Max. Revenue plunged 35% after Boeing halted deliveries,” the AP says.
The question of when — and if — the Max is allowed to fly again will almost certainly be the first major issue to be faced by new FAA administrator Stephen Dickson. A former Air Force pilot and Delta Air Lines executive, Dickson was confirmed Tuesday in a Senate vote on party lines: 52 Republicans for, 40 Democrats against.
“The FAA has come under fire for relying on Boeing employees to conduct tests and inspections that led to approval of the Boeing 737 Max in 2017, and for declining to ground the plane for more than four months” after the first fatal crash, in the sea off Indonesia, the AP says.
As for the national economy, Jim Corridore, an analyst at the financial research firm CFRA, told the Times: “Boeing is a $100 billion revenue company who just saw a 35 percent decline in revenues, so there will be some impact on the economy. But even at its size, we don’t think Boeing’s troubles are likely to significantly hurt overall U.S. GDP.”