BOEING AND AMERICAN GET TOGETHER “American Airlines anticipates that the impending software updates to the Boeing 737 Max will lead to re-certification..” By Todd Horwitz, Bubba Trading.

 

Boeing Delays 737 Max

American Airlines said Wednesday it expects federal officials to sign off on software updates and other changes to Boeing’s 737 Max jets later this year and plans to resume passenger service on the aircraft on Jan. 16.

“American Airlines anticipates that the impending software updates to the Boeing 737 Max will lead to re-certification of the aircraft later this year and resumption of commercial service in January 2020,” the airline said in a statement. “We are in continuous contact with the Federal Aviation Administration (FAA) and Department of Transportation (DOT).” Despite American’s announcement, FAA officials maintained that there is no set timeline for returning the planes to service, and said it has not given airlines a date for when the grounding will be lifted.

The company has developed a software fix for the planes after crash investigators implicated a flight-control program that malfunctioned, repeatedly pushing the nose of the Max planes down in both disasters, but the FAA hasn’t approved it yet. Some regulators, including in Europe, have expressed concerns about the plane’s design, and Boeing CEO Denis Muilenburg last month said officials around the world may not all approve the plane at the same time.

American said the schedule change will force it to cancel around 140 flights a day. The airline previously expected the planes to return to its fleet for commercial service in early December, and like other carriers, has had to repeatedly postpone the jet’s return to its schedules. Southwest Airlines struck the planes from its schedules until Jan. 5, while United Airlines expects them back Dec. 19.

Airline executives have said they are talking with Boeing about receiving compensation for the grounding, the largest ever. Boeing took a $4.9 billion after-tax charge in the second quarter to reimburse losses at carriers that can’t fly the fuel-efficient planes. American Airlines CEO Doug Parker said the carrier has had conversations with Boeing but doesn’t have a firm number yet. “It’s hard until we know when the airplane is really going to be back in service to ascertain what the damages are,” he said in an interview

Todd “Bubba” Horwitz

Financial Markets and Political Commentary
 

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.