Employees pass in front of Boeing Co. 737 Max airplanes at the company’s manufacturing facility in Renton, Washington, U.S. (Photographer: David Ryder/Bloomberg)

Boeing Turns to Texas to Store 737 Max Jets as Grounding Lingers

(Bloomberg) -- Boeing Co. has started storing 737 Max jets at a vast Texas maintenance base as the planemaker continues to churn out the single-aisle aircraft while waiting for regulators to lift a global grounding.

Planespotter Chris Edwards picked up the radar track of the first factory-fresh Max to be parked outside the Seattle area as it headed to San Antonio on Tuesday from a paint shop in California. Boeing spokesman Doug Alder confirmed his account.

“The Boeing San Antonio site will temporarily store airplanes as part of our inventory-management plan,” Alder said by email. The jets eventually “will return to Washington state where they will be delivered to our customers.”

Maintaining and storing the growing fleet of newly built 737s -- and managing the inventory costs -- is a key concern for Boeing as the grounding enters a third month following two deadly crashes. The planemaker, which is still allowed to do test flights, will eventually need to get the jets to customers once deliveries are cleared to resume. But it may need to do so on a staggered schedule if regulators from China to Canada conduct their own safety reviews.

For now, Boeing employees are working to reduce out-of-sequence work on the jets. Suppliers from Spirit AeroSystems Holdings Inc. to an engine maker owned by General Electric Co. and Safran SA are working to overcome inconsistent deliveries, Cowen & Co. analyst Cai von Rumohr said in a note to clients last week.

100 Jets

Boeing is finalizing an update to Max software that has been implicated in the two accidents. The manufacturer also is meeting with customers, and briefing flight attendants and pilots, as it works to restore confidence in the newest version of the 737.

The length of the grounding could hinge on an upcoming Federal Aviation Administration summit of global regulators, von Rumohr said. The meetings, which Boeing won’t attend, will be held May 23 in Fort Worth, Texas.

Meanwhile, Boeing has parked about 100 Max jets across four sites in the Seattle area, according to Edwards, a blogger who tracks 737 production. The company reduced output at its 737 factory in Renton, Washington, by 19% in April to a pace of 42 jets a month. But Boeing has avoided layoffs as it seeks to avoid disrupting operations once production ramps up again.

Boeing San Antonio is the largest maintenance, repair and overhaul site within the company’s global-services division, Alder said. Located at Port San Antonio, the site sprawls across 168 acres with 1.6 million square feet of building and hangar space.

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