FAA Puts Boeing Max on Path to Return to Service in October

(Bloomberg) -- U.S. aviation regulators announced an important milestone in returning Boeing Co.’s grounded 737 Max jet to service, an event one person familiar with the process said would happen no earlier than October.

The Federal Aviation Administration on Tuesday announced it is preparing to issue formal legal directives for repairs required on the jet, which indicates that the agency is comfortable with the manufacturer’s proposed redesigns. The public will have 45 days to comment on the FAA’s action.

With the public comment period and multiple other steps required before a final action, the grounding probably won’t be lifted until October at the soonest, said the person, who wasn’t authorized to speak about the issue and asked not to be named.

That is later than the “mid-year” Boeing had most recently projected, but few carriers are clamoring for the plane with air traffic plunging due to the coronavirus pandemic.

The FAA said it plans “in the near future” to release a proposed new regulation codifying the changes to the plane that will be required before it can resume carrying passengers. In addition to design alterations, the agency will also codify changes to “crew procedures” on the plane.

“Boeing is working closely with the FAA and other international regulators to meet their expectations as we work to safely return the 737 Max to service,” the company said in an emailed statement. “Safety is our priority and the schedule for return to service will be determined by the regulators.”

Boeing was trading up 3.43% to $180.35 at 1:35 p.m. in New York, holding onto earlier gains. The stock plunged 46% this year through Monday, the worst performance on the Dow Jones Industrial Average.

The FAA announcement comes three weeks after the agency conducted three days of test flights in which they put the redesigned software through its paces.

The plane, which is Boeing’s largest seller, suffered two fatal crashes that killed 346 people within less than five months. The plane was grounded worldwide in March 2019 after the second crash. Both accidents were tied to a safety feature on the plane that malfunctioned and repeatedly commanded the jets to dive.

Boeing redesigned the software system so that it can no longer fire repeatedly during a malfunction and took other steps to prevent such a crash from happening again. During post-accident evaluations of the plane, the FAA and Boeing also concluded that its flight-control computer needed to be redesigned, which proved more complicated than the initial fixes.

“While the posting of the NPRM is an important milestone, a number of key steps remain,” the FAA said in a release, referring to the notice of proposed rulemaking process.

The agency is also reviewing how pilots react to the design changes and is assessing what kinds of new training will be required.

©2020 Bloomberg L.P.