Aerospace company Boeing Co. (NYSE: BA) has overcome one of the biggest hurdles in its 104-year history, as news has emerged that its Boeing 737 MAX jets are now certified to fly again.
The jets have been grounded worldwide since March 2019, following two separate crashes that killed 346 people. This was the longest and most widespread grounding of any commercial aircraft in history.
Boeing is now likely to restart production and begin to fulfill thousands of pending orders.
Software Problems Addressed in Boeing Patches
In two separate crashes, one with Ethiopian Airlines and one with Lion Air, all crew members, and passengers were lost. Investigations revealed safety issues with the 737 MAX platform, related to automated software and faulty sensors.
The 737 MAX tends to tilt upwards upon takeoff, due to the plane’s size and the location of the engines. In both crashes, the software took data from faulty sensors, forcing the planes to tilt downwards and crash after takeoff.
The following scandal, which included a Boeing coverup of internal safety concerns and a poor certification process by the FAA, sent Boeing’s stock downwards. The company has since faced extreme pressure during the Coronavirus Pandemic as global air travel has slowed.
After groundings were announced, Boeing was forced to address shortcomings with its sensors and software. The FAA, embarrassed in the process, carried out the most stringent recertification process in its history.
Experts say that the 737 MAX will now be the “safest airplane” to fly on. MIT Aeronautics Professor John Hansman said recently that the 737 MAX has now “had more scrutiny than any other airplane in the world.”
At Least One Airline Committed to Flying the 737 MAX This Year
American was the first major airline to announce this week that it will be flying its 737 MAX fleet again. It will begin operations with Miami/New York round-trip flights beginning at the end of December.
More airlines are likely to follow, and regulators in Europe and around the world will likely certify the 737 MAX as safe, after working closely with the FAA over the past year. 400 jets were operational before the global grounding order. Boeing has 4,129 orders yet to fulfill, with unit costs ranging between $99 million and $135 million depending on the configuration.
This news will likely create an upside for Boeing’s stock, and investors may now consider it a bargain with the potential for strong gains in the coming years.
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