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FAA halts Boeing 737 production expansion; allows MAX 9 to fly

Published 01/24/2024, 06:09 PM
Updated 01/25/2024, 01:25 AM
© Reuters. Grounded Boeing 737 MAX aircraft are seen parked at Grant County International Airport in Moses Lake, Washington, U.S. November 17, 2020.  REUTERS/Lindsey Wasson/File Photo

By David Shepardson

WASHINGTON (Reuters) -The Federal Aviation Administration said on Wednesday that it would not allow Boeing (NYSE:BA) to expand 737 MAX production in the wake of a mid-air emergency on an Alaska Airlines jet, but the MAX 9 model involved could return to service after inspections.

The blowout of a cabin panel on Jan. 5 led the aviation regulator to ground 171 737 MAX 9 jets and resulted in the cancellation of thousands of flights by U.S. carriers Alaska Airlines and United Airlines.

The FAA said the halt to expanding production of Boeing's best-selling 737 MAX narrowbody family was needed to "ensure accountability and full compliance with required quality control procedures" by the planemaker.

Shares of Boeing fell about 4% in after hours trade.

"We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues uncovered during this process are resolved," FAA Administrator Mike Whitaker said in the statement.

It was not immediately clear how the halt to MAX production "expansion" announced by the FAA would affect the company's detailed near-term production ramp-up plans.

The MAX family includes the best-selling 737 MAX 8 which is Boeing's main cash cow. Boeing declined immediate comment.

In October, Boeing CEO Dave Calhoun said the company planned to reach production of 38 MAX planes per month by the end of 2023.

"We are keeping our suppliers hot according to the master schedule," he said at the time.

Boeing's latest 737 supplier master schedule, which sets the production pace for its supply chain, calls for production to rise to 42 jets per month in February, 47.2 in August, 52.5 by February 2025 and 57.7 in October 2025.

However, Boeing's own production pace can lag the supplier master schedule.

The FAA on Wednesday also laid out an inspection and maintenance process so the grounded MAX 9 planes could return to service.

© Reuters. Grounded Boeing 737 MAX aircraft are seen parked at Grant County International Airport in Moses Lake, Washington, U.S. November 17, 2020.  REUTERS/Lindsey Wasson/File Photo

"The exhaustive, enhanced review our team completed after several weeks of information gathering gives me and the FAA confidence to proceed to the inspection and maintenance phase," Whitaker said.

Alaska Airlines said it had received the inspection regime and planned to start sending planes back into service on Friday.

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