Boeing’s 737 MAX up for suspension

Shanghai Newspaper_ Boeing's 737 MAX up for suspension

BOEING Co.’s 737 MAX jetliner will be suspended in January as two fatal crashes of the aircraft drags into 2020. This marks the biggest assembly line halt in more than 20 years.

The 737 MAX has been grounded since March after the Indonesia and Ethiopia crash that killed 346 people in a span of five months. The Federal Aviation Administration denied the jet’s return to service before 2020 after a two-day board meeting. Moreover, it was seen as a public rebuff to Boeing’s hopes of moving faster.

The occurrence could have effects across its global supply chain and the US economy. On the contrary, Boeing said it would not lay off any of over 12,000 employees during the production break.

The production halt will have an immediate impact on airlines that already have their deliveries postponed. Moreover, many flights were forced to be canceled or lease older replacements. More importantly, it marks a deepening crisis. Its safety record is being looked into and customers demanding for compensation. It has also put their relationship with FAA under strain.

In addition, House representative Rick Larsen calls Boeing’s decision a body blow to its workers and the region’s economy aside from the fact that aso threatens to hit the US economy. He expressed how he is ready to work with Boeing workers to ensure they will access to the necessary resources should matters lead to prolonged shutdown.

Deliveries are frozen until regulators approve the aircraft to commercially fly again. But until now, Boeing has continued to produce 737 MAX jets at a rate of 42 per month and purchase parts from suppliers at a rate of up to 52 units per month.

The shutdown’s length remains to be certain while predictions say that 737 MAX might return to service after software training charges draws a sharp response from the US regulator.

The FAA stresses that their first priority if safety and further implied that they have not set a timeframe as to when the work will be completed. The agency emphasized that they would continue to work with global regulators to review proposed charges to the 737 MAX.

Analysts think that the shutdown was inevitable after Boeing was forced to abandon its year-end goal for returning to service.

Boeing decided on delivering some 400 planes that have been produced and stored, once the FAA gives the green light.