Boeing’s 737 Max Comeback Nears With United Delivery, Gol Flight

Boeing Co. is closing in on two key milestones in the comeback of its 737 Max, according to people familiar with the matter: the jet’s return to regular service and the first delivery since U.S. regulators lifted a 20-month grounding.

United Airlines Holdings Inc. is expected to receive the first Max delivery since the flying ban was imposed in March 2019 after two deadly crashes, said the people, who asked not to be named because the talks are confidential. The plans are in flux and American Airlines Group Inc. may get the initial handover instead, they said, as Boeing seeks to start unlocking delivery payments.

In another boost for the planemaker, Brazil’s Gol Linhas Aereas Inteligentes SA said it will resume commercial flights with the Max on Dec. 10, more than two weeks before American reintroduces the jet to U.S. travelers. Grupo Aeromexico SAB and Panama’s Copa Holdings SA are also planning flights soon.

The moves will enable Boeing to start cranking up its once-mighty commercial juggernaut, the 737 program, now that regulators in the U.S., Europe and Brazil have endorsed software revisions and new pilot-training curriculum for the Max. The manufacturer is also poised to score a follow-on order for the embattled plane from one of its largest customers, Ryanair Holdings Plc, as soon as Thursday.

Boeing climbed 5.1% to close at $223.85 Wednesday on news of the likely Ryanair order. The stock has tumbled 31% this year, the second-worst decline on the Dow Jones Industrial Average.

“We continue to work closely with global regulators and our customers to safely return the airplane to service,” said Jessica Kowal, a Boeing spokeswoman.

Customer Response

The Chicago-based company is working hard to generate positive momentum around the Max after two years of bruising publicity over its response to the accidents, which were linked to a flawed flight-control system and killed 346 people. Losses related to the Max ballooned to $20 billion.

U.S. and Brazilian regulators lifted their groundings last month after a lengthy technical review of Boeing’s software upgrades, while European safety officials granted preliminary approval.

Key customers are rallying around the single-aisle jet, a critical source of cash for Boeing, even though the coronavirus pandemic has crushed demand for new aircraft.

Southwest Airlines Co., the largest Max operator, has signaled interest in expanding its orders for the smallest aircraft in the jetliner family. American Airlines took reporters aloft in one of its Max planes on Wednesday.

“It’s a great thing when core customers are coming back for more of the product,” said Bloomberg Intelligence analyst George Ferguson.

Clearing Inventory

Boeing hasn’t delivered any Max aircraft since the grounding began. With the deliveries, the planemaker will start to clear its inventory of about 450 jetliners built and stored during the flying ban.

United intends to take delivery of eight of the jets this month, a spokesman said. American declined to comment on its delivery plans beyond an October disclosure in which the company said it could take as many as eight Max planes this year.

Brazil’s Gol is planning a gradual return of the plane over the next few weeks after putting each plane in its seven-jet fleet through technical flights. Aeromexico said it’s working with regulators as they weigh approval of the plane.

In Panama, Copa expects to start flying at least two of its Max aircraft before year-end, executives said during an earnings call on Nov. 19. The company said at the time that it needed about two weeks to complete maintenance on planes coming out of storage.

Copa has six Max aircraft in Panama and is awaiting delivery of seven others, Chief Financial Officer Jose Antonio Montero said in an email. He declined to comment on plans to resume flights for the Max.

©2020 Bloomberg L.P.

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