FAA Demands Extra Checks on Grounded Boeing 737 MAX 9 Jets After Flight Cancellations

Summary

  • United Airlines and Alaska Airlines have cancelled flights on their Boeing 737 MAX 9 fleets, following an FAA notice that another round of inspections will be required before the planes can be deemed fit for service.
  • The FAA also plans to audit the production line and suppliers of the aircraft, and is considering having an independent body take over from Boeing in certifying aspects of safety that the FAA previously assigned to Boeing.
  • Furthermore, the federal regulator notes the grounding of 171 planes, due to issues similar to those at hand, is intended to ensure the safety of American travelers.
  • On Friday, the FAA reconfirmed that 40 of the planes need re-inspection, following which the authority will review the results and decide if it is safe for these aircraft to fly again.
  • Alaska and United Airlines have had to cancel hundreds of flights since planes of this model were grounded.
  • Boeing shares have seen a significant drop since the beginning of the year, as confidence in the company has been severely shaken.

FAA Increases Scrutiny on Boeing

The Federal Aviation Administration has stated that it will increase its level of scrutiny on the Boeing 737 MAX 9, leading to both United Airlines and Alaska Airlines cancelling flights through Tuesday. As part of this increased scrutiny, the regulator will conduct an audit of the production line and suppliers of the Boeing 737 MAX 9. The FAA is even considering the appointment of an independent entity to oversee certain aspects of certifying the safety of new aircraft, parts of which were previously assigned to Boeing.

Boeing Facing Struggles

Boeing is currently facing an array of challenges. The grounding of 171 planes with configurations identical to the one in the recent incident was said to be for the safety of American travellers. The decision to lift this grounding rests upon successful inspections. Furthermore, the two U.S. airlines who use this type of aircraft, Alaska and United, are facing cancellations in hundreds of flights owing to this grounding. The FAA stated that 40 of the planes must go under reinspection.

Impact on Boeing’s Reputation and Shares

The company’s shares slumped down 2.2% on Friday, marking a nearly 12% drop since the incident on January 5. The confidence in Boeing has dwindled post the crashes involving MAX 8 aircraft in 2018 and 2019 which led to 346 casualties. As a result, Congress passed comprehensive reforms for the certification of new airplanes.

Investigation into the Boeing MAX 9

The FAA recently announced a formal probe into the MAX 9, citing “significant problems”. The National Transportation Safety Board (NTSB) is also investigating if the jet involved in the Alaska incident had missing or improperly tightened bolts. Following these incidents, Boeing has vowed to fully cooperate with the regulator and support measures that bolster quality and safety.

Potential Impacts on Trading

The recent developments surrounding Boeing including the FAA’s increased scrutiny, flight cancellations and decline in share value could potentially influence trading patterns in the market, specifically for those who have investments associated with Boeing’s shares.

Correction Notice: The 2018 and 2019 crashes involved MAX 8, not MAX 9, aircraft.

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