Boeing Co. (BA) - Get Report shares traded lower Monday amid reports that the world's biggest planemaker could temporarily shutdown production of its 737 MAX after failing to meet its own deadline for FAA recertification for the grounded jet.
Boeing's board, which began a two-day meeting in Chicago on Sunday, is said to be considering either scrapping or suspending 737 MAX production, according to multiple media reports, while the Seattle Times said the company is leaning towards a temporary shutdown. Last week, Federal Aviation Administration chief Steve Dickson said there was no set timetable for the grounded aircraft's return, adding that multiple milestones need to be met before it can be granted clearance.
“We continue to work closely with the FAA and global regulators towards certification and the safe return to service of the Max,” Boeing said in a statement to various media outlets. “We will continue to assess production decisions based on the timing and conditions of return to service, which will be based on regulatory approvals and may vary by jurisdiction.”
Boeing shares were marked 3.75% lower in the opening minutes of trading Monday to change hands at $328.87 each, a move that would extend the stock's three-month decline to around 13.3%.
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.
The planemaker said last week 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.