Shares of Boeing Co. (NYSE: BA) sank just under 2% on Monday after the Wall Street Journal reported the Company’s 737 Max jet may not return to service until next year. Boeing is yet to prove to the Federal Aviation Administration (FAA) and international regulators that all of the airliner’s safety issues are resolved.
According to the Journal, a source within the FAA said the plane is expected to start flying again in January 2020 “under the latest scenario”. Boeing has faced a series of obstacles as its tried to get the 737 Max flying again. In early June the Company informed the FAA that some of its 737 Max and 737 NG jets may have defective wing parts. Later in the month, the FAA said it found a new “potential risk that Boeing must mitigate.”
The FAA has indicated it is in no rush to return the Max to the skies. In June, the agency said it is “following a thorough process, not a prescribed timeline” for returning the plane to service. The FAA is continuing to evaluate Boeing’s software modification to the Maneuvering Characteristics Augmentation System (MCAS), which includes a series of sensors designed to automatically adjust the nose of the plane. A design flaw in the MCAS is widely believed to have caused two fatal crashes involving the 737 Max.
Major airlines have responded to the Max’s delayed return by scratching the jet from their flying schedules through the busy summer season. American Airlines (NASDAQ: AAL) on Sunday said its yanking the Max from its schedule through November 2. The Company, however, said it “remains confident” the aircraft will be recertified to fly this year. United Airlines (NASDAQ: UAL) on Friday said it will extend its Boeing 737 Max groundings through Nov. 3, amounting to 2,100 cancellations in September and 2,900 in October. Southwest Airlines’ (NYSE: LUV) latest schedule revision was announced last month when the Company said it will keep the Max grounded until October 1.