Boeing Shares Jump as 737 Jet Orders Expected to Resume

Shares of Boeing were heading higher in trading this week after Wall Street learned that the company is expecting to resume 737 Max deliveries in December and commercial service green light in January.

The company’s stock experienced the biggest rally on Monday since June after the announcement.

Boeing may be very close to gaining regulators’ approval of its bestselling planes. If the grounding is lifted in December and training approved in January “airlines could resume commercial service,” a Boeing spokesman commented.

“We know they need more time to get their fleets ready and pilots trained, but the plane and training [approvals] will both be done by January, permitting commercial service.”

Boeing shares on Monday jumped 4.6%, their largest percentage gain since June 18th.

It was on Friday that Southwest Airlines and American Airlines pulled the planes from their schedules until early March, nearly a year since regulators’ grounding orders.

It was earlier this year that Boeing’s 737 jet had received a global ban after two fatal airline crashes. Boeing had halted deliveries and cut its production rate to 42 a month, a decrease of 20%.

The Federal Aviation Administration on Monday reiterated that its officials “have set no timeframe for when the work will be completed.”

“The FAA is following a thorough process for returning the Boeing 737 Max to passenger service,” the agency stated. “We continue to work with other international aviation safety regulators to review the proposed changes to the aircraft.”

Boeing said it took a $4.9 billion charge to compensate airlines who have lost money without the jets, but the final sums have not yet been determined.

According to a press release from Boeing, there are five key milestones the company must complete with the FAA before return to service:

FAA eCab Simulator Certification Session: A multi-day eCab simulator evaluation with the FAA to ensure the overall software system performs its intended function, both normally and in the presence of system failures. COMPLETED

FAA Line Pilots Crew Workload Evaluation: A separate, multi-day simulator session with airline pilots to assess human factors and crew workload under various test conditions.

FAA Certification Flight Test: FAA pilots will conduct a certification flight(s) of the final updated software.

Boeing Final Submittal to the FAA: After completion of the FAA certification flight, Boeing will submit the final certification deliverables and artifacts to the FAA to support software certification.

Joint Operational Evaluation Board (JOEB) Simulator Training Evaluation: The Joint Operational Evaluation Board (JOEB), a multi-regulatory body, conducts a multi-day simulator session with global regulatory pilots to validate training requirements. Following the simulator session, the Flight Standardization Board will release a report for a public comment period, followed by final approval of the training.

Boeing and the FAA successfully concluded the first of these milestones this past week, and are now working towards the FAA line pilots evaluation and the FAA certification flight test.

Disclaimer: We have no position in Boeing Co. (NYSE: BA) and have not been compensated for this article.