Boeing Shares Lose Altitude On New Coronavirus-Driven Concerns

Shares of airplane maker Boeing Co BA were down nearly 6% Friday after The Wall Street Journal reported that the grounded 737 MAX may not return to the skies until late summer or early fall. 

737 MAX's Return Up In The Air 

The fate of Boeing's grounded 737 MAX hinges on a regulatory review and approval from the Federal Aviation Administration. But the FAA's ability to do so is impacted by stay-at-home orders and travel restrictions impacting flight tests and the ability to interact with international regulators.

Also, the FAA's inspectors are unable to verify maintenance checks and other firsthand observations that the plane is operating properly.

Boeing will report first-quarter results next Wednesday, and CEO David Calhoun is expected to respond to these challenges, among others, according to the WSJ.

Bloomberg reported on Thursday that Calhoun could also confirm workforce reductions and a slashing of Boeing's 787 Dreamliner output by half.

Why It's Important For Boeing 

Boeing's inability to gain certification for its planes implies it can't deliver units to airliners that are willing to pay for them, according to WSJ.

Boeing might be fighting against the clock, as agreements with customers allow them to exit the agreement without penalties if deliveries are delayed for a year, the Journal's sources said. 

What's Next For BA 

The FAA has no firm timetable to certify the 737 MAX.

Pertaining to the 787 aircraft, a potential cut in production would "compound the cash burn problem it is already facing," CFRA analyst Colin Scarola said of Boeing. 

Boeing shares were down 5.38% at $130.21 at the time of publication Friday afternoon. 

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