FAA halts Boeing 737 Max production expansion, but clears path to return Max 9 to service

The Federal Aviation Administration on Wednesday halted Boeing‘s planned expansion of its 737 Max aircraft production, but it cleared a path for the manufacturer’s Max 9 to return to service in the coming days, nearly three weeks after a door plug blew out during an Alaska Airlines flight.

“Let me be clear: This won’t be back to business as usual for Boeing,” said FAA Administrator Mike Whitaker in a statement Wednesday. “We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues uncovered during this process are resolved.”

Boeing has been scrambling to ramp up output of its best-selling aircraft as airlines clamor for new jets in the wake of the Covid-19 pandemic.

“We will continue to cooperate fully and transparently with the FAA and follow their direction as we take action to strengthen safety and quality at Boeing,” the company said in a statement.

Boeing shares were down roughly 1% in after-hours trading after the FAA’s announcement.

The FAA on Wednesday also said it approved inspection instructions for the Max 9 aircraft. Airlines had been awaiting that approval to review their fleets to return those planes to service.

The FAA grounded the 737 Max 9 planes after a fuselage panel blew out as Flight 1282 climbed out of Portland, Oregon, on Jan. 5. The grounding forced United Airlines and Alaska Airlines, the two U.S. airlines with the planes, to cancel hundreds of flights.

Alaska said it would resume 737 Max 9 flights on Friday “with more planes added every day as inspections are completed and each aircraft is deemed airworthy.”

United plans to return the planes to service beginning on Sunday, according to a message to employees from Chief Operating Officer Toby Enqvist.

“In the days ahead, our teams will continue to proceed in a way that is thorough and puts safety and compliance first,” Enqvist said in the internal message.

The CEOs of both carriers have expressed frustration with Boeing after the issue, the most serious in a recent spate of apparent manufacturing flaws on Boeing aircraft. The aircraft on the Alaska flight was delivered late last year.

The FAA is investigating Boeing’s production lines after the Alaska flight. Whitaker told CNBC on Tuesday that the FAA will keep “boots on the ground” at Boeing’s factory until the agency is convinced quality assurance systems are working. He said the agency is switching to a “direct inspection” approach with Boeing.

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