Boeing may stop production of 737MAX at years end

Boeing told the financial press yesterday that while it expects the 737MAX to return to service during the last quarter of this year, if it’s delayed beyond that in to 2020 the picture is very different.

The company said yesterday it will have to stop producing the MAX completely until the aircraft is re-certified.

There is almost nowhere viable left to store aircraft by years end. Producing aircraft at the companies own cost, storing them and paying suppliers, without income from sales, is costing Boeing huge amounts of reserve cash and it’s looking to have to raise new debt to finance it anyway.

The news didn’t go down well in the stock market.

This is another kind of brinksmanship and a political move by the company. The bullish stock market has been rising in no small part on Boeing’s share price, long seen as a driving force as it also affects so many supplier companies that rise with it.

President Trump is notoriously obsessed about the stock market, seeing it as one of his achievements – when in realty it has little or nothing to do with government policy. Boeing shares taking a dive is something the company expects him to notice, as it drives down the whole market, and he’ll put pressure on the new head of the FAA to push things faster towards recertification.