Boeing 737 MAX Production To Be Suspended In January 2020

Boeing to halt production of 737 MAX in January

Boeing will temporarily halt the production of 737 MAX, which caused the death of 346 people in two flights this year in January 2020. However, a month ago Boeing provided an update on 737 MAX, saying it could be in service in January 2020. Boeing decided to suspend the production after Federal Aviation Administration (FAA) said they don’t plan to lift a flight ban this year.

In a statement that was released by Boeing, they said, “Safely returning the 737 MAX to service is our top priority. We know that the process of approving the 737 MAX’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers and the flying public have confidence in the 737 MAX updates. As we have previously said, the FAA and global regulatory authorities determine the timeline for certification and return to service. We remain fully committed to supporting this process. It is our duty to ensure that every requirement is fulfilled, and every question from our regulators answered.”

Boeing continued, “We believe this decision is least disruptive to maintaining long-term production system and supply chain health. This decision is driven by a number of factors, including the extension of certification into 2020, the uncertainty about timing and conditioms of return to service and global training approvals, and the importance of ensuring that we prioritize the delivery of stored aircraft. We will continue to assess our progress towards a return to service milestones and make determinations about resuming production and deliveries accordingly.”

Boeing struggling to store the produced aircrafts….

Turkish Airlines has taken delivery of 12 737 MAX till date

Despite being grounded, Boeing has continued to produce around 40 aircraft a month. These aircraft, once built, have been stored in various Boeing facilities. Boeing has as many as 400 newly built 737 MAX aircraft awaiting the ban to be lifted and the aircraft to be delivered accordingly.

Boeing shares hit by this decision…

Boeing shares have taken a dip of around 4.47%  after this decision was made.

The company has assured employees that there will be no layoffs during the work slowdown. Workers on the 737 production line will continue working on related projects or be reassigned to other tasks in the area of the factory in Renton, Washington.

What are your thoughts about this decision?

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