Boeing 737 Max aircraft are assembled at the corporate’s plant in Renton, Washington, U.S. June 25, 2024.
Jennifer Buchanan | Via Reuters
Boeing has won regulator approval to ramp up production of its best-selling 737 Max jetliners to 42 a month, a milestone for the manufacturer nearly two years after the Federal Aviation Administration capped its output after a midair near-catastrophe.
In January 2024, the FAA restricted Boeing to constructing the planes at a rate of not more than 38 a month — though it had been below that level on the time — after a door plug from a virtually recent 737 Max 9 blew off from an Alaska Airlines flight because it climbed out of Portland, Oregon.
Boeing didn’t reinstall key bolts on the door plug before it left the factory, a National Transportation Safety Board report found. The 737 Max returned and landed safely, nevertheless it put the corporate back into crisis mode just as leaders were expecting a turnaround yr.
The FAA said Friday that it could still oversee Boeing’s production. “FAA safety inspectors conducted extensive reviews of Boeing’s production lines to be certain that this small production rate increase shall be done safely,” the agency said in an announcement.
Boeing said it could work with its suppliers to extend production.
“We appreciate the work by our team, our suppliers and the FAA to make sure we’re prepared to extend production with safety and quality on the forefront,” Boeing said Friday in an announcement.
A rise in output is vital to the corporate’s turnaround after years of problems, since airlines and other customers pay for the majority of an aircraft once they receive it. CEO Kelly Ortberg, named last yr to stabilize the highest U.S. manufacturer, said last month he expected to soon win FAA approval to raise output to 42, with other increases planned for down the road.
“We’ll go from 42 after which we’ll go up one other five, and we’ll go up one other five,” Ortberg told a Morgan Stanley investor conference in September. “We’ll get to where that inventory is more balanced with the availability chain, probably across the 47 a month production rate.”
The change shows the FAA’s softening tone and increased confidence in Boeing after years of restrictions. Last month, the agency said it could allow Boeing to again log off on a few of its aircraft itself before they’re handed over to customers, as a substitute of that responsibility falling solely with the FAA.
The Max program was crippled following two crashes of the planes in 2018 and 2019, which killed all 346 people on the 2 flights. The aircraft was grounded for nearly two years. Covid also hurt production, followed by supply chain problems and, last yr, a labor strike at Boeing’s fundamental factories within the Seattle area.
Boeing hasn’t posted an annual profit since 2018. Nevertheless it has increased output, and its deliveries of recent planes are on the right track to hit the very best rate since that yr.
Boeing is scheduled to release quarterly results on Oct. 29.
— CNBC’s Phil LeBeau and Meghan Reeder contributed to this report.
