Boeing gets FAA nod for fix to 737 MAX electrical issue

Boeing receives U.S. regulatory approval for a fix to an electrical grounding issue that had affected its 737 MAX airplanes, clearing the way for their return to service.

Get Report received U.S. regulatory approval for a fix to an electrical grounding issue that had affected about 100 of its troubled 737 MAX airplanes, clearing the way for the jets’ quick return to service after flights were halted in early April.

“After gaining final approvals from the FAA, we have issued service bulletins for the affected fleet,” Boeing told Reuters. “We are also completing the work as we prepare to resume deliveries.”

The announcement was a relief for U.S. air carriers that have been looking to get the planes back into service as air travel demand increases amid rising vaccination rates and corresponding re-openings – and ahead of the busy summer travel season.

The top three U.S. 737 MAX operators – Southwest Airlines  (LUV) – Get Report, American Airlines  (AAL) – Get Report and United Airlines  (UAL) – Get Report – pulled more than 60 737 MAX jets from service after the April notice from Boeing.

FAA Administrator Steve Dickson told U.S. lawmakers on Wednesday that the electrical issue, which had grounded about a quarter of the MAX fleet, would need a “pretty straightforward fix.”

Dickson also said he was fully confident in the safety of the MAX, which was approved to returned to service in November 2020 after being grounded in March 2019 following two fatal crashes in five months that killed 346 people.

Boeing said it delivered only 17 planes in April, down 41% from 29 in March, mostly due to tepid deliveries of the 737 MAX. Boeing delivered just four MAX planes last month as it worked to fix the electrical grounding problem.

At last check, shares of Boeing were up 3.61% at $228.26. Earlier the stock was under pressure, though TheStreet founder Jim Cramer pointed to selling pressure on Wall Street as reason Boeing’s shares weren’t trading higher, tweeting “futures so powerful that they won’t let Boeing lift …”

Boeing is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells BA? Learn more now.

By M. Corey Goldman www.thestreet.com