Boeing Co. (BA) - Get Report shares jumped higher Monday after the planemaker received approval from the Federal Aviation Administration to being test flights of its grounded 737 MAX aircraft as early as this week.
The FAA, which has been assessing a series of changes to the aircraft's flight system over the past year, gave the green light to Boeing Sunday in an email to lawmakers on both House and Senate Committees that have been overseeing the planemaker's efforts to revive the troubled jet, which has been grounded by transportation authorities around the world for the past 15 months following two fatal crashes in late 2018 and early 2019.
"Testing is expected to take several days, and will include a wide array of flight maneuvers and emergency procedures to enable the agency to assess whether the changes meet FAA certification standards," the FAA said, noting that "getting to this step does not mean the FAA has completed its compliance evaluation or other work associated with return to service."
Boeing shares were marked 7.8% higher in early trading Monday to change hands at $183.08 each, a move that would still leave the stock with a year-to-date decline of around 44%.
"We continue to work diligently on safely returning the 737 MAX to commercial service," Boeing spokesman Bernard Choi told TheStreet in an email on Sunday, although he declined to confirm or deny any planned tests, saying, "We defer to the FAA and global regulators on the process."
Late last month, Boeing said it has resumed production of its troubled 737 MAX aircraft, while revealing plans to cut more than 12,000 jobs, as it awaits approval from the FAA, as well as regulators around the world, that would allow the plane to return to service following crashes in Indonesia and Ethiopia that killed 346 people.
Boeing's net orders for May, however, were pegged at -9, including 14 cancellations of the grounded 737 MAX that took the year-to-date total to 295.
Software fixes to address the Maneuvering Characteristics Augmentation System, or MCAS, re-work were completed in May, following 360 hours of testing over more than 200 flights, Boeing reported earlier this spring.
Boeing said in April that the preliminary report into the cause of Ethiopian Airlines Flight 302's fatal crash, which killed all 157 passengers on board on March 11, as well as the Lion Air 610 disaster in Indonesia in early October, which took the lives of 189 people, were caused by activation of the MCAS sytem, in response to "erroneous angle of attack information" from a broken sensor.
Boeing vowed to correct the cause of the tragic incidents while recognizing the "devastation of the families and friends of the loved ones who perished."
The FAA has said it would "evaluate aspects of the 737 MAX automated flight control system, including its design and pilots' interaction with the system, to determine its compliance with all applicable regulations and to identify future enhancements that might be needed."