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Boeing To Restart 737 Max Production In May, Give Priority To Clearing Backlog: Sources

Boeing To Restart 737 Max Production In May, Give Priority To Clearing Backlog: Sources

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Boeing Co. (NYSE: BA) could restart manufacturing its 737 Max planes in May after production stalled last year due to two fatal accidents.

What Happened

Boeing may restart the production of 737 MAX planes provided there are no delays caused by the coronavirus pandemic. It must also obtain the requisite clearance from the United States authorities, reported Reuters citing sources.

The planemaker expects the 737 Max aircraft to return to service by the middle of 2020. Suppliers have been asked to get ready 737 parts by April. Reuter’s sources said production is due to start in May. The sources also confirm that the coronavirus is causing delays as production was originally slated to restart in April.

Regarding the resumption of production Greg Smith, Boeing’s Chief Financial Officer said, “It’ll be a very slow, methodical, systematic approach to warming the line-up, and getting crews back in place.” He said that the priority of Boeing was to get the customers’ fleet back up and added that the increase in production would come alongside clearing the backlog of the planes. Smith remarked, “We don’t want to add to inventory.”

Why It Matters

Last year, the 2 crashes of 737 Max planes killed 346 people in Ethiopia and Indonesia and brought to a halt the production of  the 737 Max.

Boeing is sitting on a fleet of 400 undelivered MAX planes, according to Reuters. Earlier in the month, it was reported that electrical wiring issues had delayed the return of 737 MAX to the skies.

Due to the pandemic, the company has already shut down production for two weeks at its manufacturing plants in northwest Washington, where it employs 66,000 people.

The aviation giant is seeking a minimum of $60 billion in government aid to mitigate the effects of COVID-19 on the aerospace manufacturing industry.

Price Action

Boeing shares traded 6.23% higher at $135.63 in the after-hours session on Tuesday. The shares had closed the regular session 20.89% higher at $127.68.

Photo Credit: Edward Russell via Wikimedia.


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