Boeing’s Max cleared to fly with extensive fixes

by BLOOMBERG

WASHINGTON • Boeing Co’s 737 Max can safely return to the skies with an extensive package of fixes, US regulators ruled, after a scarring 20-month hiatus prompted by a pair of fatal crashes.

The actions, which the Federal Aviation Administration (FAA) began to post on its website yesterday, mark the end to the longest grounding of a jetliner in US history and set the stage for airlines and other regulators around the world to resume passenger service with the plane.

Boeing shares jumped 5.6% to US$221.76 (RM906.54) before the start of regular trading in New York yesterday. Through Tuesday, they had lost 50% of their value since the March 10, 2019 crash of an Ethiopian Airlines Group flight that triggered the global grounding of the 737 Max.

The FAA action — which started with the release of instructions for how its inspectors should handle the Max — is a dramatic turning point for Boeing after more than two years of bad news surrounding its best-selling model.

But the aircraft’s return won’t mean an immediate end to the controversy or a cash infusion for the company’s suffering bottom line.

A criminal probe by the US Justice Department continues.

Frayed relations with the FAA threaten to result in fines or other penalties and the Securities and Exchange Commission also has an open investigation. Meanwhile, the Covid-19 pandemic has crushed the airline industry, prompting airlines to cancel orders for the Max and thwarting Boeing’s plans to quickly reverse its losses.

The FAA is requiring repairs to a safety system that went haywire in the two crashes and multiple other flaws discovered during months of reviews. It is also mandating new pilot training for the Max focusing on issues that arose in the accidents.

The actions are unlikely to quell controversy surrounding the plane. Family members of those killed in an Ethiopian Airlines crash on March 10, 2019, have repeatedly charged the plane is unsafe even with the fixes and it remains to be seen whether the public will be wary of its return.

The Max’s comeback will be gradual. It won’t be widely flown for several months as airlines must first train pilots, inspect jets emerging from long desert sojourns and complete the FAA-mandated repairs. Of the US operators, only American Airlines Group Inc has put the Max jets back into its schedule, with flights starting Dec 29 on a lone route: Miami to New York.

Southwest Airlines Co plans to put its entire pilot workforce through the new training before reintroducing the Max, delaying the return by months, chairman Gary Kelly said on Monday in an online interview with Aviation Week Network.

“It will be well into 2021 before we’re in revenue service,” Kelly said.

United Airlines Holdings Inc, the other US carrier with the Max, expects to resume service in the first quarter.

In all, there are 72 of the planes in the US and another 315 at airlines in the rest of the world. About 450 additional Max jets were built by Boeing but haven’t been delivered, amounting to billions of dollars in inventory that the company will soon be able to start turning into cash.

The European Union Aviation Safety Agency (EASA) has said it is satisfied with the FAA-led review of the Max and is prepared to lift its ban soon. Canada and Brazil, which are also among the world’s leaders in aircraft certification, are also expected to take similar actions. At the insistence of EASA and Canada, Boeing is also working on longer-term fixes to improve the plane’s safety.

However, China, the first country to ground the jet, hasn’t given a clear timetable for its return. — Bloomberg