Regulators Split on Return of MAX Jet -- WSJ

Date : 09/12/2019 @ 8:02AM
Source : Dow Jones News
Stock : Boeing Co (BA)
Quote : 379.39  -5.05 (-1.31%) @ 10:04PM

Regulators Split on Return of MAX Jet -- WSJ

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By Doug Cameron 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 12, 2019).

Boeing Co. said Wednesday that the return to service of the 737 MAX jetliner could vary from country to country unless global regulators can agree on a single path to approving software and training changes.

Airlines and aircraft owners are pushing for regulators across the world to agree on the fixes to avoid jets being limited to flying only in countries that have granted approval, which would complicate fleet and staff planning.

Boeing has been working with regulators in the U.S., Europe, Brazil, China and elsewhere on software and training fixes following two fatal crashes that led to the grounding of the global MAX fleet in March.

However, cracks have appeared in the process of securing uniform approval from regulators, who have the final say on when the planes will fly again.

"I think a phased ungrounding of the airplane among regulators around the world is a possibility," said Boeing Chief Executive Dennis Muilenburg during an interview at an industry conference near Los Angeles.

Mr. Muilenburg reiterated guidance issued in July that Boeing continues to plan for regulators approving a return to service early in the fourth quarter and then building up the MAX production rate. It has yet to submit the proposed fixes for formal review.

With the clock ticking, big MAX customers have expressed concern that splits among regulators could delay the final approval process.

"Unfortunately there's political winds, other factors involved that need to be taken into consideration," said Steven Udvar-Házy, executive chairman of Air Lease Corp, at a conference last week. "The net result of all of this: the back-to-service timing of the MAX could be delayed because there isn't a total convergence." The leasing giant has received 15 of the 165 MAX jets it ordered.

Industry leaders are also concerned that a split over the MAX could unravel the existing global system for certifying jetliners. "It will set a precedent," Alexandre de Juniac, CEO of the International Air Transport Association, told reporters last week.

Mr. Muilenburg said Wednesday that while regulators had different questions and concerns, that didn't necessarily mean Boeing would have to make hardware as well as software changes to the MAX. "I see broadly convergence among the regulators," he said.

Boeing continues to plan on keeping monthly production of its 737 line at 42, boosting output when the plane is cleared to fly again to a targeted rate of 57 by the end of next year.

Mr. Muilenburg in July said Boeing may have to trim output further or even freeze production if the regulatory process drags on longer than expected.

He said Wednesday that while nothing had emerged to change that guidance, closing down the line remained an option and might be "more efficient" than another cut. Boeing in April trimmed output to 42 from 52.

Most of the 600 suppliers on the MAX program have favored Boeing maintaining some production, citing the risk of losing workers in a tight labor market during the production halt, as well as higher costs to restart its assembly line.

"We'd prefer to continue keeping the line going," said John Scannell, chief executive of Moog Inc., which makes control motors for the MAX. "I think all the suppliers would say it's easier to ramp down gradually and then ramp back up."

Boeing's share price has rebounded in recent weeks, even as the window for returning the MAX to service this year narrows and other issues have weighed on the company. Its 787 Dreamliner plant in South Carolina had to close for four days last week because of Hurricane Dorian, and a testing problem on its new 777X jetliner leaves it little margin for error to deliver that plane late next year.

The shares gained ground on Wednesday after Mr. Muilenburg's remarks, rising 3.6% to $382.94, their highest level since April.

Write to Doug Cameron at doug.cameron@wsj.com

 

(END) Dow Jones Newswires

September 12, 2019 02:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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