Boeing (BA) 737 Max 10 Gains FAA Approval After Years of Delay

Published on · Source: cnbc.com

Boeing (BA) 737 Max 10 Gains FAA Approval After Years of Delay

AI Summary

Summarized by AI from the source below

The Federal Aviation Administration (FAA) approved the Boeing 737 Max 10 on Tuesday, marking the last model in Boeing's 737 Max family to receive government certification after years of delays. This approval follows a review of a navigation system glitch, which the FAA said does not affect flight safety.

The 737 Max 10, the largest model in the series, was initially expected to start service in 2020 but faced delays due to increased regulatory scrutiny after two Max crashes in 2018 and 2019 and additional required engineering changes, including adjustments to the engine anti-icing system. Boeing CEO Kelly Ortberg noted at a Morgan Stanley conference that orders for the Max 10 represent about 30% of the company’s backlog, with major customers such as Alaska Airlines, American Airlines, United Airlines, and Delta Air Lines.

This certification enables airlines to begin flying passengers on the 737 Max 10, although it may take months to incorporate the aircraft into their schedules. The FAA had earlier approved the smaller 737 Max 7 in early August. Boeing is also increasing production capacity, having opened a fourth production line for 737 Max airplanes in Everett, Washington. This certification is a key milestone for Boeing as it aims to ramp up deliveries and recover from past setbacks.

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Our take

Opinion from the Newsstocks AI desk, not investment advice

We think the FAA approval of the 737 Max 10 is a positive step for Boeing, enabling it to fulfill a significant portion of its order backlog. However, past regulatory delays and the need for engineering changes reflect ongoing challenges. Boeing's ability to ramp production effectively will be critical to sustain momentum.

Key numbers

Percent of Boeing backlog from Max 10 orders
about 30%
Year 737 Max 10 was initially set to start flying
2020

What could help

  • FAA approval removes a major regulatory hurdle for Boeing's 737 Max 10 production and deliveries.

What could hurt

  • Certification delays have caused airlines to delay or reconsider original equipment plans.

The background

A plane receiving certification means it meets safety standards to carry passengers. This allows the manufacturer to deliver planes and airlines to schedule flights.

Questions readers ask

Why was the Boeing 737 Max 10 certification delayed?

Certification was delayed due to increased scrutiny after two crashes in 2018 and 2019 and necessary engineering changes, including to the engine anti-icing system.

Which airlines are customers for the Boeing 737 Max 10?

Customers include Alaska Airlines, American Airlines, United Airlines, and Delta Air Lines.

What portion of Boeing's order backlog does the 737 Max 10 represent?

Orders for the 737 Max 10 make up about 30% of Boeing's backlog.

About The Boeing Company (BA)

Boeing is one of the two dominant commercial-aircraft makers and a major U.S. defense and aerospace contractor.

The Industrials sector covers manufacturers, aerospace, defense and transport companies tied to economic activity.

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