Regulators likely won’t certify Boeing’s new 777x aircraft until 2023, which could put some of the aircraft’s orders in jeopardy. Boeing stock fell modestly.
In a May 13 letter, the Federal Aviation Administration told Boeing (BA) that it didn’t have enough data and preliminary safety assessments to review the 777X, according to The Seattle Times and other sources. The regulator said it “realistically” will not certify the widebody aircraft until mid to late 2023 as more test flights could be needed. Under that timeline, the jet might not enter service until 2024.
Boeing cut its 777X order backlog by over a third in February after saying in a securities filing that it wouldn’t likely start deliveries until 2023. Under the original schedule, deliveries were expected to start in 2020.
According to the May letter, Boeing still needs to address an “upcoming major software update with the software load of flight control… The FAA understands that there are many significant problem report items that will be addressed by that version of the software load, including the software fix for the un-commanded pitch event that occurred on December 8, 2020.”
The FAA said that it hasn’t yet seen how Boeing plans to implement all the “corrective actions identified by the root cause investigation” of the December incident.
Boeing Stock Falls As Airline Could Rethink 777X Orders
Shares fell 3.4% to 239.96 on the stock market today. Boeing stock closed just above its 50-day line. Fears over the spread of the highly contagious Delta variant of the coronavirus weighed down travel-related stocks Monday.
This isn’t the first major software issue for Boeing. Carriers and regulators have blamed Boeing for not fully evaluating the Maneuvering Characteristics Augmentation System, (MCAS) software on the 737 Max. MCAS issues were implicated in two deadly crashes, leading to the Boeing 737 Max being grounded for more than 20 months.
The 777X is the first aircraft Boeing is attempting to certify since the 737 Max. European regulators have already said they will subject the widebody jet to extra inspections amid failures of the FAA to adequately inspect the 737 Max.
An FAA official told the Seattle Times that even if the 737 Max crashes hadn’t happened, the issues with the 777X would have still required regulatory scrutiny.
Boeing currently has 361 orders for 777X aircraft on the books. Analysts don’t see that number falling drastically during the delay.
“Boeing had already talked about having their first delivery out in 2023. The most recent news here potentially causes a little bit more scrutiny or a spotlight on that delivery date, that it might slip out a little further,” said Edward Jones analyst Jeff Windau. “But given that it was already kind of pushed out to that point, we’re not anticipating any real changes from their 777X orders at this point.”
But in May, Emirates warned that it would not accept deliveries of the 777X unless they were “performing 100% to contract.” The carrier has over 150 777X aircraft on order and is considering switching some of the 777X orders to 787 Dreamliners.
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