FAA Administrator Steven Dickson said he was "100% confident" in the safety of the aircraft after rescinding a 20-month old order that allows the plane to resume commercial flights. The 737 MAX was grounded in March of 2019 following two fatal crashes which were ultimately linked to its navigation system, in Ethiopia and Indonesia that killed 346 people.
The FAA's airworthiness directive requires "installing new flight control computer (FCC) software, revising the existing Airplane Flight Manual (AFM) to incorporate new and revised flightcrew procedures, installing new MAX display system", and likely paves the way for similar approvals from regulators around the world and draw a line under what has undoubtedly been the worst chapter in Boeing's 104 year history.
"We will never forget the lives lost in the two tragic accidents that led to the decision to suspend operations," said CEO David Calhoun. "These events and the lessons we have learned as a result have reshaped our company and further focused our attention on our core values of safety, quality and integrity."
Boeing shares were marked 4.2% higher in early trading Wednesday to change hands at $218.60 each, the highest since early June. That's still more than 50% south of its levels in March of 2019 in the days prior to the Ethiopian Airlines disaster that took the lives of 157 passengers and crew.
Boeing told investors in late October that it has around 3,400 737 aircraft in backlog -- as well as 450 already built and stored in inventory -- and doesn't expect to increase production rates beyond 31 new planes in 2022 as it continues to assess demand in the wake of travel restrictions triggered by the coronavirus pandemic.
"We expect the 737 MAX delivery timing, along with the production rate ramp-up profile to continue to be dynamic as they will ultimately be dictated by the pace of the commercial market recovery, which has been slow and remains uncertain," Boeing CFO Greg Smith told investors on October 29. "There is no material change in the estimate for the total abnormal cost of $5 billion, and we expect these costs will be expenses incurred over this year and next year."
The global coronavirus pandemic, however, has hit Boeing hard, prompting the planemaker to increase its target for staff reductions last month hat will take its overall headcount to under 130,000 by the end of next year.
Boeing posted a loss of $754 million for the three months ending in September, as revenues fell nearly 30% to $14.1 billion. Commercial airplane revenues fell 56.4% to $3.6 billion, Boeing said, while defense, space and security revenues slumped to $6.8 billion.
"Despite the near-term headwinds, we remain confident in our long term future and are focused on sustaining critical investments in our business and the meaningful actions we are taking to strengthen our safety culture, improve transparency and rebuild trust," CEO Dave Calhoun said.