December 12, 2019 / 6:20 PM / 2 months ago

Boeing scuttles 2019 timeline for 737 MAX return after CEO meets with U.S. FAA

WASHINGTON (Reuters) - Boeing Co (BA.N) on Thursday abandoned its goal of winning approval this month from the Federal Aviation Administration to unground the 737 MAX after Chief Executive Dennis Muilenburg met with senior U.S. aviation officials.

FILE PHOTO: Federal Aviation Administration (FAA) Administrator Stephen Dickson testifies before a House Transportation and Infrastructure Committee hearing on "The Boeing 737 MAX: Examining the Federal Aviation Administration's Oversight of the Aircraft's Certification." at the Rayburn House office building in Washington, U.S., December 11, 2019. REUTERS/Mary F. Calvert

The announcement came after a congressional hearing on Wednesday in which numerous lawmakers prodded the FAA to take a tougher line with Boeing as it continues to review the plane that has been grounded since March after two fatal crashes in Indonesia and Ethiopia that killed 346 people.

FAA Administrator Steve Dickson said on Wednesday he would not clear the plane to fly before 2020 and disclosed the agency has an ongoing investigation into 737 production issues in Renton, Washington. He added there are nearly a dozen milestones that must be completed before the MAX returns to service. Approval is not likely until at least February and could be delayed until March, U.S. officials told Reuters.

Muilenburg and Boeing’s commercial airplanes chief, Stan Deal, met with Dickson and “committed to addressing all of the FAA’s questions,” the company said, adding it will work to support the agency’s “requirements and their timeline as we work to safely return the Max to service in 2020.”

Dickson told Muilenburg, according to an email sent to lawmakers by the FAA, that “Boeing’s focus should be on the quality and timeliness of data submittals for FAA review. He made clear that FAA’s certification requirements must be 100% complete before return to service.”

Boeing had said last month it expected the FAA would allow it to resume 737 MAX deliveries in December.

The company previously warned a significant delay in MAX approval could force it to cut or halt production of the aircraft, a move that would have repercussions across its global supply chain.

Boeing’s shares closed 1.1% lower at $346.29 on Thursday.

Separately, American Airlines Group Inc (AAL.O) said on Thursday it was extending cancellations of 737 MAX flights through April 6. American, the largest U.S. airline, had previously canceled about 140 flights a day through March 4 and now expects to resume 737 MAX passenger flights on April 7.

Gary Kelly, the CEO of Boeing’s largest 737 MAX customer, Southwest Airlines Co (LUV.N), said he was “concerned” about what Boeing decides to do with its production line. Southwest was supposed to have 75 MAX jets in service this year and, like other airlines, it has had to cancel routes and scale back growth plans as it operates a slimmer fleet.

Kelly said it is “likely” the airline will again need to push back its restart date from March.

In an email to congressional staff earlier on Thursday disclosing the meeting between Dickson and Muilenburg, FAA official Philip Newman said Dickson is “concerned that Boeing continues to pursue a return-to-service schedule that is not realistic due to delays that have accumulated for a variety of reasons. More concerning, the administrator wants to directly address the perception that some of Boeing’s public statements have been designed to force FAA into taking quicker action.”

Reporting by David Shepardson in Washington; Additional reporting by Tracy Rucinski in New York; Editing by Nick Zieminski and Matthew Lewis

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