Regulators Split on Return of MAX Jet -- WSJ
September 12 2019 - 3:02AM
Dow Jones News
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)
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