Boeing 737 Max Unlikely to Fly Early Next Quarter, SunTrust Says
Boeing 737 Max Unlikely to Fly Early Next Quarter, SunTrust Says
(Bloomberg) -- It appears unlikely that Boeing Co.’s troubled 737 Max jets will start flying again in the early fourth quarter, SunTrust Robinson Humphrey analyst Michael Ciarmoli wrote in a note to clients.
“It is nearly the end of September and the Max remains grounded, and to our knowledge Boeing has still not submitted a data package to the Federal Aviation Administration,” the analyst said, noting that international aviation regulators have diverged from the FAA.
With 737 Max inventory building, Ciarmoli said a production halt or additional rate cut would be “prudent” at least until a clear path to a global return to service is identified.
The 737 Max was grounded globally in March after two crashes within a span of five months killed 346 people. While Boeing has said that the aircraft is on track to be cleared by the FAA early in the fourth quarter, analysts and aviation experts have been growing wary, given a growing divide between U.S. and European regulators.
Meanwhile, public opinion about flying on a 737 Max hasn’t improved in recent months, according to surveys by UBS. Analyst Myles Walton said that 67 out of 68 respondents in its latest survey ranked the Max as the number one issue for the stock.
“Despite ongoing uncertainty on 737 Max return to service, respondents believe investors are significantly more bullish now than in July,” the analyst added.
Boeing shares had taken a big hit after the second crash in early March, but have recently recovered, rising nearly 18% from a mid-August low. Shares were up 0.4% in early trading on Tuesday.
To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Jennifer Bissell-Linsk
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