FAA Halts Boeing's 737 Max Production Expansion Amid Quality Control Issues: 'Won't Be Back To Business A

The Federal Aviation Administration (FAA) has put a stop to Boeing Co‘s (NYSE:BA) planned expansion of its 737 Max aircraft production. This decision comes in the wake of the recent incident involving a Max 9 aircraft, which has now been cleared for service.

What Happened: The FAA announced on Wednesday that it would not approve any requests from Boeing for an expansion in production or additional production lines for the 737 MAX until the quality control issues are resolved, CNBC reported. This decision follows an incident where a door plug blew out during an Alaska Air Group Inc (NYSE:ALK) flight, prompting the grounding of the Max 9 planes.

FAA Administrator Mike Whitaker stated, “Let me be clear: This won't be back to business as usual for Boeing.”

"We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues uncovered during this process are resolved."

The FAA has also approved inspection instructions for the Max 9 aircraft, a crucial step for airlines to review their fleets and return the planes to service.

Boeing’s shares fell by approximately 4% in after-hours trading following the FAA’s announcement. The company has been striving to increase the production of its 737 Max aircraft to meet the rising demand from airlines amid the COVID-19 pandemic.

Why It Matters: This decision by the FAA comes after a series of incidents involving Boeing’s 737 Max aircraft. Earlier this month, a fuselage panel blew out during a flight, leading to the grounding of the Max 9 planes and the cancellation of hundreds of flights by United Airlines Holdings Inc (NASDAQ:UAL) and Alaska Airlines, the two U.S. carriers with these planes. The FAA has been investigating Boeing’s production lines since the Alaska flight, and the recent decision indicates that the agency is not satisfied with the current state of Boeing’s quality control.

Boeing’s CEO, Dave Calhoun, is set to meet with U.S. senators to address concerns about the 737 Max 9 grounding. The grounding followed a mid-air blowout of a cabin panel on a new Alaska Air Group Inc jet.

Meanwhile, the CEO of Alaska Airlines, Ben Minicucci, has expressed frustration with Boeing after internal inspections revealed a significant number of loose bolts on their 737 Max 9 aircraft. This revelation came after a near-miss incident earlier this month.

Boeing’s much-awaited 737 Max deliveries to China have also faced further delays following the Alaska Airlines incident. The incident prompted Chinese carriers, including China Southern Airlines Co Ltd (OTC:CHKIF), to conduct additional safety inspections.

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ALKAlaska Air Group Inc

CHKIFCHINA STHN AIRLNS CO ORD by China Southern Airlines Co. Ltd.

$0.5300-%

UALUnited Airlines Holdings Inc

$126.080.07%

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