Boeing 737 Max Planes Return To Sky, FAA Stops Company's Planned Expansion: 'One Step Forward, Two Steps Back'
Portfolio Pulse from Chris Katje
The FAA has not approved Boeing's (NYSE:BA) planned expansion for the 737 Max aircraft due to quality issues, but has allowed the 737 Max 9 to return to service for United Airlines (NASDAQ:UAL) and Alaska Air Group (NYSE:ALK). Moody's maintained Boeing's Baa2 rating with a stable outlook, despite considering the news as 'one step forward, two steps back.' Alaska Air plans to resume flights with the 737 Max 9, and United Airlines is expected to follow. Boeing's stock is up 1% on Friday but down 21% YTD.
January 26, 2024 | 7:34 pm
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POSITIVE IMPACT
Alaska Air Group plans to begin flying the 737 Max 9 and expects to complete inspections by the end of next week, aiming for a full flight schedule return.
Alaska Air's return to flying the 737 Max 9 and the completion of inspections are positive developments that could contribute to improved operational efficiency and customer confidence.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
United Airlines is set to resume flights with Boeing's 737 Max 9 planes on January 28, following the FAA's clearance.
The resumption of flights with the 737 Max 9 is likely to be positive for United Airlines as it can potentially lead to operational normalization and customer reassurance.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Boeing faces a mixed FAA ruling, with the 737 Max 9 cleared to fly but expansion plans halted. Moody's maintains a stable outlook despite the setbacks.
The FAA's decision to halt Boeing's expansion plans is negative, but allowing the 737 Max 9 to return to service is positive. The mixed impact may lead to neutral short-term price movement, but investor sentiment could be affected by the regulatory scrutiny and safety concerns.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100