Industry Boeing temporarily halts 737 MAX production

Starting in January 2020, Boeing will halt the production of the 737 MAX aircraft family, the manufacturer released on Tuesday. After the global fleet was grounded, Boeing continued to manufacture new aircraft. Now, approximately 400 aircraft are currently in storage and are awaiting their delivery. Industry experts suggest, that the suspension of the production could last at least a year.

Until then however, Boeing will need the new certification for the aircraft. After the two fatal crashes of 737 MAX aircraft in Ethiopia and Indonesia, the leading aviation authorities removed the certification for the aircraft to ensure full safety for passengers and all involved.

The Federal Aviation Authority (FAA) and global regulatory authorities determine the timeline for certification and the return into service. As this process is taking longer than expected, Boeing has decided to halt the production. This decision was necessary but also represents a further drop in revenues.

Since the grounding of the global 737 MAX fleet, airlines had to suffer severe financial losses. Norwegian also had to stop certain transatlantic routes from Ireland to the United States.

Boeing stated: "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 the timing and conditions of return to service and global training approvals, and the importance of ensuring that we can prioritize the delivery of stored aircraft. We will continue to assess our progress towards return to service milestones and make determinations about resuming production and deliveries accordingly."

The manufacturer added, that the company would remain fully committed to supporting this process. It would be the duty of Boeing to ensure that every requirement is fulfilled and every question from the regulators have been answered.

During the time of the production stop, Boeing will employ the affected staff with 737-related work, or the persons could be temporarily assigned to other Boeing teams in Puget Sound.

Financial information regarding the production suspension will be released in connection with the 4Q19 earnings release, which will be made public in late January next year.