Boeing Resumes Slide After FAA Chief Says 737 MAX Won't Get December Return Approval

Boeing's December return schedule for the 737 MAX was dealt a blow by FAA chief Steve Dickson Wednesday, sending shares to the bottom of the Dow Jones Industrial Average.
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Boeing Co  (BA) - Get Report shares fell the most in more than a week in early Wednesday trading after the head of the Federal Aviation Administration said the planemaker's troubled 737 Max isn't likely to be certified to fly before the end of the year.

Steve Dickson told CNBC earlier Wednesday that there is no set timetable for the grounded aircraft's return, adding that multiple milestones need to be met before it can be granted clearance. Boeing executives, including CEO Dennis Muilenberg, had been touting a December return for the workhorse jet, which has been grounded since last spring following crashes in Ethiopia and Indonesia that killed 346 people.

“We’re going to follow every step of the process, however long that takes. I’ve made it clear that I’m going to support my people and that means they are going to take whatever time it takes to get this process completed and to do it the right way," Dickson told the broadcaster before his appearance in front of the House Transportation and Infrastructure Committee later today in Washington. “If you just do the math, it’s going to extend into 2020.”

Boeing shares were marked 2.23% lower in early Wednesday trading, the most since December 3, and changing hands at $340.10 each.

"Boeing continues to target FAA certification of the MAX flight-control software updates during this quarter," the company said in a statement last month. "Based on this schedule ... the resumption of MAX deliveries to airline customers could begin in December, after certification, when the FAA issues an Airworthiness Directive rescinding the grounding order."

The planemaker said yesterday that it booked 30 new orders for the 737 last month, much of which came from the Dubai Airshow in the United Arab Emirates, with Turkey's Sun Express buying 10 737 MAX 8 planes, while an unidentified customer --reportedly Kazakhstan's Air Astanta 00 signed up to buy 20 more 737s.

Boeing said it would increase costs related to the grounded 737 MAX by around $900 million, taking the total to around $3.6 billion, adding it not only expects a return to service in the fourth quarter, it sees production rising from 42 planes a month to 57 planes per month by the end of 2020.