Boeing 737 Max Planes Return To Sky, FAA Stops Company's Planned Expansion: 'One Step Forward, Two Steps Back'

Zinger Key Points
  • Boeing got good news and bad news related to its 737 Max 9 planes this week.
  • After the planes were grounded, flights could resume as early as Friday.

Airplane manufacturer The Boeing Company BA has faced several setbacks related to an incident involving its 737 Max 9 aircraft.

The Federal Aviation Administration (FAA) issued several rulings this week, which were both good and bad for the company.

What Happened: On Wednesday, the FAA announced it would not approve a planned expansion for the 737 Max aircraft from Boeing until quality issues are resolved.

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

While Boeing suffered that setback, the FAA determined that the 737 Max 9 can return to the skies for companies like United Airlines Holdings UAL and Alaska Air Group Inc ALK.

Moody's said the latest news on Boeing was "one step forward, two steps back."

"The FAA's decision to allow the 737 Max 9 to promptly return to service is a step forward for the Max program; however, the cap on the current production rate is two steps back and decidedly credit negative," Moody's said.

Moody's kept the Baa2 senior unsecured rating and stable outlook for Boeing.

Boeing CEO Dave Calhoun spent Wednesday on Capitol Hill. He faced questions from members of Congress over the issues of the planes and what's being done to improve safety.

"We fly safe planes," Calhoun told reporters Wednesday, as shared by CBS. "We don't put airplanes in the air that we don't have 100% confidence in."

Boeing did not comment on the CEO's meeting with lawmakers Wednesday.

"We continue to communicate transparently with Congress, the FAA and the NTSB. We are focused on taking action to strengthen quality and safety across Boeing," Boeing told Benzinga in a statement.

Related Link: US Lawmakers Urge Boeing CEO To Put ‘Safety Ahead Of Profits’ As Senators Probe Into 737 MAX 9 Safety Lapse

Why It's Important: After an incident on a Boeing 737 Max 9 plane happened earlier this month, hundreds of flights from United Airlines and Alaska Air were canceled. Since then, the planes have remained grounded.

Alaska Airlines was set to begin flying the 737 Max 9 with a flight from Seattle to San Diego on Friday. This would mark the return of the plane by a U.S. airline since the FAA grounded the planes.

The company said it expects inspections on all 737 Max 9s to be completed by the end of next week. This could lead to the return of a full flight schedule.

"Each of our 737-9 Max will return to service only after the rigorous inspections are completed and each plane is deemed airworthy according to FAA requirements," the company said.

Alaska Air said each aircraft inspection takes up to 12 hours.

Alaska Air highlighted a Flexible Travel Policy in the report. This will allow guests who are not comfortable on a 737 Max 9 to receive other travel arrangements through Jan. 31.

United Airlines is expected to resume flights of its 737 Max 9 planes on Sunday, Jan. 28.

The Jan. 5 incident saw a door plug blow out during a flight. It happened while the plane was 16,000 feet in the air and has left many feeling uneasy about flying again.

A recent Morning Consult survey found that net trust in Boeing had declined by double digits, Benzinga reported.

BA Price Action: Boeing shares are up 1% to 204.46 on Friday versus a 52-week trading range of $176.25 to $267.54. Shares of Boeing are down 21% year-to-date in 2024.

Read Next: Passengers Hit Boeing With Lawsuit: Ill-Fated Alaska Airlines Flight Was ‘Waking Nightmare'

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