Boeing made the decision to withdraw a minor request it had previously submitted to the Federal Aviation Administration (FAA) regarding the grounded 737 MAX 7. Although this move may impact the delivery of planes to airlines, it has been deemed the “right decision” by one legislator.
On Monday, Boeing announced that it was retracting a “time-limited” exemption request related to the engine inlet deicing system of the 737 MAX 7. It is worth noting that the MAX family of jets consists of four versions, with the MAX 8 and 9 having been certified and currently in operation. On the other hand, the MAX 7 and 10 have yet to receive certification for commercial service. The MAX 10, being approximately 30 feet longer than the MAX 7, boasts an increased seating capacity of around 50 more passengers.
The exemption would have allowed Boeing additional time to address a known issue without delaying the certification process. Boeing expressed confidence that the problem did not pose a threat to flight safety and that flight crew procedures could effectively mitigate any potential risks.
“While we are confident that the proposed time-limited exemption for that system follows established FAA processes to ensure safe operation, we will instead incorporate an engineering solution that will be completed during the certification process,” stated Boeing via email. “As always, the FAA will determine the timing of certification and we will follow their lead every step of the way. We’re committed to being transparent, listening to all our stakeholders, and taking action to strengthen safety and quality at Boeing.”
Boeing Delays MAX 7 Certification
Introduction
Boeing’s decision to withdraw the exemption for the MAX 7 certification is expected to cause a delay until 2026, according to Vertical Research Partners analyst Rob Stallard. The move has received support from U.S. Senator Tammy Duckworth, who called it the right decision. With Boeing stock down and ongoing concerns, this development adds another layer of complexity for investors and customers alike.
Impact on Boeing and Airlines
The delay in MAX 7 certification is not ideal for Boeing shareholders or airline customers. While the MAX 7 variant currently has 391 orders, the MAX 8 and MAX 10 have amassed a total of 7,000 orders. This might require airlines to consider altering their orders from the MAX 7 to the MAX 8, similar to what Southwest Airlines has done in the past.
Market Reaction
On Tuesday, Boeing stock saw a 0.7% decline in premarket trading, while both S&P 500 and Nasdaq Composite futures were down by 0.1%. Although this news may cause concern for investors, it is a necessary step given the recent challenges faced by Boeing.
Background and Context
Boeing’s stock has lost approximately 18% since January 5th when an emergency door plug blew out of a 737 MAX 9 operated by Alaska Air Group midair. As a result, the FAA grounded all MAX 9 jets in the U.S., and these planes have only been allowed to return to service after thorough inspection and repair.
Conclusion
Boeing’s decision to delay the certification of the MAX 7 reflects the ongoing turmoil within the company. While this may cause inconvenience for shareholders and airline customers, it is a justified move considering recent events. As the situation unfolds, it remains crucial for investors to closely monitor Boeing’s actions and their impact on the aviation industry.
