Boeing may halt 737 Max production as plane grounding drags on

A new issue could delay aircraft's return

As Boeing reported its worst-ever loss arising from the global grounding of its flagship 737 Max after two fatal crashes, the aviation giant warned that it could be forced to temporarily halt production of the plane if the grounding continues longer than expected.

Boeing reported a loss of US$2.9 billion for the second quarter, a massive drop from the US$2.2 billion profit posted in the same period of last year.

Meanwhile, revenues in the latest quarter tumbled 35.1 percent to US$15.8 billion, reflecting the fallout from halted deliveries of the 737 MAX.

The company had set aside US$4.9 billion to compensate airlines for cancelled flights and the delay in plane deliveries.

But Boeing acknowledges that uncertainty continues to surround the timing and conditions regarding the 737 Max fleet’s return to service, causing airlines to repeatedly push back the target date for returning the jets to service as the regulatory timeframe has dragged on.

“Boeing is working very closely with the FAA on the process they have laid out to certify the 737 MAX software update and safely return the MAX to service. Disciplined development and testing is underway and we will submit the final software package to the FAA once we have satisfied all of their certification requirements. Regulatory authorities will determine the process for certifying the MAX software and training updates as well as the timing for lifting the grounding order”, the American airplane manufacturer said in a statement.

“This is a defining moment for Boeing,” CEO Dennis Muilenburg said in a statement, adding that the company remains focused on safely returning the 737 Max to service.

The aviation giant in April cut Max production to 42 a month from 52, storing planes until the jet is cleared to fly, but it has not cut jobs at its Washington state factory, according to an AFP report.

The crisis already has rippled through the US economy, hitting industrial output, which feeds into economic growth, and reducing exports which widens the politically-sensitive trade deficit.

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