Boeing 737 Max aircraft are assembled at the company’s plant in Renton, Washington, U.S. June 25, 2024.
Jennifer Buchanan | Via Reuters
Boeing has won regulator approval to ramp up production of its best-selling 737 Max jetliners to 42 a month, a milestone for the manufacturer nearly two years after the Federal Aviation Administration capped its output after a midair near-catastrophe.
In January 2024, the FAA restricted Boeing to building the planes at a rate of no more than 38 a month — though it had been below that level at the time — after a door plug from a nearly new 737 Max 9 blew off from an Alaska Airlines flight as it climbed out of Portland, Oregon.
Boeing failed to reinstall key bolts on the door plug before it left the factory, a National Transportation Safety Board report found. The 737 Max returned and landed safely, but it put the company back into crisis mode just as leaders were expecting a turnaround year.
The FAA said Friday that it would still oversee Boeing’s production. “FAA safety inspectors conducted extensive reviews of Boeing’s production lines to ensure that this small production rate increase will be done safely,” the agency said in a statement.
Boeing said it would work with its suppliers to increase production.
“We appreciate the work by our team, our suppliers and the FAA to ensure we are prepared to increase production with safety and quality at the forefront,” Boeing said Friday in a statement.
An increase in output is key to the company’s turnaround after years of problems, since airlines and other customers pay for the bulk of an aircraft when they receive it. CEO Kelly Ortberg, named last year to stabilize the top U.S. manufacturer, said last month he expected to soon win FAA approval to raise output to 42, with other increases planned for down the line.
“We’ll go from 42 and then we’ll go up another five, and we’ll go up another five,” Ortberg told a Morgan Stanley investor conference in September. “We’ll get to where that inventory is more balanced with the supply chain, probably around the 47 a month production rate.”
The change shows the FAA’s softening tone and increased confidence in Boeing after years of restrictions. Last month, the agency said it would allow Boeing to again sign off on some of its aircraft itself before they’re handed over to customers, instead of that responsibility falling solely with the FAA.
The Max program was crippled following two crashes of the planes in 2018 and 2019, which killed all 346 people on the two flights. The aircraft was grounded for nearly two years. Covid also hurt production, followed by supply chain problems and, last year, a labor strike at Boeing’s main factories in the Seattle area.
Boeing hasn’t posted an annual profit since 2018. But it has increased output, and its deliveries of new planes are on track to hit the highest rate since that year.
Boeing is scheduled to release quarterly results on Oct. 29.
— CNBC’s Phil LeBeau and Meghan Reeder contributed to this report.
