By Valerie Insinna and David Shepardson
(Reuters) – Boeing’s first delivery of the 737 MAX 7 has been delayed to 2024, the company said in an SEC filing on Wednesday.
Boeing still expects the Federal Aviation Administration to certify the MAX 7 and begin FAA certification flight testing for the MAX 10 in 2023, the company said. MAX 10 is currently slated for first delivery in 2024.
Both the MAX 7 and MAX 10 are seen as critical for Boeing to compete against Airbus for orders at the top and bottom of the narrowbody markets. A delay in getting the MAX 7 to launch customer Southwest Airlines will further draw out its entry into service, originally set for 2022, and could hinder the carrier’s expansion, as it exclusively operates the 737.
Boeing shares were up 7.7% on Wednesday afternoon on the strength of second quarter-results that beat Wall Street consensus.
Boeing and the FAA have been going back and forth on the safety management system paperwork for months needed to get the MAX 7 certified and there is no clear timetable when the FAA might be able to sign off on Boeing’s submissions, sources told Reuters.
“Safety dictates the timeline of certification projects. We cannot discuss ongoing certification projects,” the FAA said in a statement.
Boeing Chief Executive Dave Calhoun had said in January the company thinks “first delivery for the 7 will be this year and probably for the 10 the next year.”
But in May, Mike Fleming, Boeing’s senior vice president for commercial development programs, said that MAX 7 certification was taking a “considerable amount of time” due to new documentation requirements.
The MAX 10 is the Boeing’s answer to Airbus’ wildly-successful A321 neo, which has dominated in competitions against the MAX 9, while the smaller MAX 7 competes against Airbus’ A220.
Southwest CEO Bob Jordan said in March that he didn’t anticipate putting the MAX 7 into service in 2023, as the process could take six months from delivery, and that an early 2024 entry into service was the best case scenario.
Last month, Alaska Airlines CEO Ben Minicucci told Reuters the airline is “anxious” to begin taking deliveries of the larger Boeing 737 MAX 10 to help it carry more passengers once the plane is certified.
Boeing must first win approval from the Federal Aviation Administration for its smaller MAX 7 before it can get approval for the MAX 10. Both variants have faced major delays amid more intense regulatory scrutiny after criticism of the earlier certification process for the MAX 8, which suffered fatal crashes in 2018 and 2019.
(Reporting by Valerie Insinna and David Shepardson in Washington; Editing by Chris Reese and Nick Zieminski)
