Boeing Soars on 8% Gain as 737-7 Approval Masks Bigger Issues
Boeing shares surged by 8% on Monday as the company received an amended type certificate for its 737-7 aircraft from the FAA. The approval clears the way for commercial service of the smallest 737 MAX, but it's not the most significant development for Boeing.
According to management, testing on the 737-7 was already finished, and the certificate was expected. However, the freed-up test engineers will be moved onto the 777X program, which carries a harder deadline of 2027. The 777X program has completed over 55% of its certification flight testing.
The near-term constraint on deliveries lies in the supply chain and delivery paperwork rather than the type certificate. Boeing needs to improve engine deliveries from GE and secure seat certifications before it can increase production. Management warns that deliveries may be uneven rather than steady due to these constraints.