Boeing to Resume Max Production Before Flight Ban Is Lifted
Boeing expects global regulators to start clearing the aircraft to fly in the middle of this year.
(Bloomberg) -- Boeing Co. will resume production of the 737 Max before the best-selling plane is allowed back in the air as the company attempts to recover from one of the worst crises in its 104-year history.
The Chicago-based manufacturer halted production in January, 10 months after the jet was grounded worldwide following two crashes that killed 346 people. Boeing failed to sell any commercial planes in January, the second month with no orders since the flying ban was imposed.
Boeing expects global regulators to start clearing the aircraft to fly in the middle of this year, though senior sales executive Ihssane Mounir said Wednesday at the Singapore Airshow that the timings of their decisions may be different. Vice president of commercial marketing, Randy Tinseth, outlined the timetable to restart manufacturing and said any resumption would begin slowly.
The timing is a balancing act for Boeing. A prolonged suspension of manufacturing would put extra stress on jobs, supply chains and future airplane orders. At the same time, prematurely restarting production would only add to the 700 Max jets already on the tarmac, a backlog that Boeing says will take several quarters to clear.
Mounir said no customers were scrapping 737 Max fleet plans. Boeing is also in talks over widebody aircraft and expects to secure some orders soon, he said.
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Spirit AeroSystems Holdings Inc., a maker of fuselage, engine pylons and wing components that depends on the Max for half of its sales, has slashed its dividend to preserve cash and laid off 2,800 employees.
Tinseth mapped out some of the other elements of Boeing’s plan to get the Max flying again. He reiterated the manufacturer will help train Max pilots on simulators as part of the compensation packages for airline customers.
While Boeing expects the Max to fly again mid-2020, regulators that are reviewing a fix to the jet’s flight-control software -- implicated in both crashes -- will have the final word. In Singapore on Tuesday, Federal Aviation Administration head Steve Dickson said there’s no schedule for the Max’s recertification flight.
The 737 is a workhorse for airlines globally plying short- to medium-haul routes on fast turnarounds. The importance of getting the Max back in the air was underscored by Boeing’s market forecast for Southeast Asia, a region it said will need 4,500 new aircraft worth $710 billion over the next two decades to meet demand from a growing middle class.
At a briefing in Singapore on Wednesday, Mounir said the coronavirus hasn’t had an impact on supply chains yet, but some deliveries for Chinese customers have been held up in Seattle. He also said Boeing is a little over a year away from entering the 777X into service. The long-range widebody aircraft, which is so big that its wings are hinged, completed its first successful test flight last month.
--With assistance from Haslinda Amin.
To contact the reporters on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net;Kyunghee Park in Singapore at kpark3@bloomberg.net;Anurag Kotoky in New Delhi at akotoky@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Angus Whitley, Will Davies
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