Boeing’s 737 Max may not fly till early 2020, Barclays says
Growing divide between regulators in U.S. and Europe could extend planes’ grounding
Boeing Co.’s troubled 737 Max jets are unlikely to return to service until early 2020 as regulatory authorities in the U.S. and Europe remain divided and the plane maker has yet to submit its finalized software fix planned for this month, according to Barclays.
In a note lowering forecasts for the company, analyst David Strauss estimated the company’s free cash flow for 2021-2022 will be about 20 per cent lower than what was expected before the aircraft was grounded.
The analyst said his updated view “reflects a substantial slowdown” given that large customers appeared to have
significantly reduced payments based on their financial disclosures and that Boeing’s progress payment balance hadn’t increased in the second quarter.
Boeing 737 Max planes were grounded in March following two fatal crashes within a span of five months.
The company has said the aircraft is on track to be cleared by U.S. regulators early in the fourth quarter, but some aviation industry executives have recently warned that a growing divide between the European Union Aviation Safety Agency and the U.S. Federal Aviation Administration may extend the grounding.
Such a delay would also hurt airlines, many of which have removed the Max from their flying schedules until the end of this year or early next year.
On Monday, Southwest Airlines Co. said it was working with Boeing on reimbursement for the lengthy grounding. The airline said it plans to share part of the payback with employees.
Boeing shares were up as much as 2.25 per cent in New York on Tuesday.