Another Setback as Boeing Delays Return of 737 MAX

In a surprise announcement Tuesday, Boeing Co. said the re-certification of its troubled 737 MAX plane will be delayed until at least “mid-2020” – and perhaps not in the air again until the fall or later.

The news sent Boeing’s stock tumbling 5.5% before trading was temporarily halted. The stock rallied slightly late in trading on Tuesday but still finished down more than 10 points.

Production on the plane was stopped Monday, with more than 400 undelivered planes still sitting at Boeing’s facilities, and 387 already in use by airlines that have been grounded since March of 2019, following the deaths of 346 passengers and crew in two separate 737 MAX crashes.

“We are informing our customers and suppliers that we are currently estimating that the ungrounding of the 737 MAX will begin during mid-2020,” the company said in a statement. “This updated estimate is informed by our experience to date with the certification process. Returning the MAX safely to service is our number one priority, and we are confident that will happen.”

The Federal Aviation Administration also issued a statement on Tuesday, saying “The agency is following a thorough, deliberate process to verify that all proposed modifications to the Boeing 737 MAX meet the highest certification standards. We have set no timeframe for when the work will be completed.”

The announcement will most certainly have a trickle-down effect. Airlines will be forced to go into the peak summer travel season without the use of the 737 MAX for the second consecutive year. Suppliers, some of whom have already laid-off workers, will be further hampered by the delay.

Fuselage producer Spirit AeroSystems has already furloughed 2,800 workers. Aviation expert Kevin Michaels, managing director of AeroDynamic Advisory, told Forbes that a company like Spirit and its subsidiaries are in danger.

“There are a lot of small companies in the central U.S. supplying Spirit that I think can’t survive a six-month production shutdown,” Michaels said.