Certification removes one of the largest overhangs on Boeing’s stock, given how sharply shares reacted to the last delay, falling nearly 7% in late September when a software glitch put approval on hold. The bigger financial prize is cash flow: Boeing has been carrying dozens of completed but undelivered MAX 7 and MAX 10 jets, and converting that inventory into deliveries should support cash generation over the next year or more. Attention now shifts to Boeing’s third-quarter results on 27 October, where investors will look for a delivery timeline and any update to cash flow guidance. For Airbus, the approval ends a long period in which the A321neo faced no direct rival at the top of the single-aisle market.

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Seven years late and one software scare later, Boeing finally has its answer to the A321neo cleared to fly, and with it a large backlog it can at last start turning into cash.

Summary:

  • The FAA granted final certification to the 737 MAX 10 on Tuesday, the largest variant of Boeing’s best-selling jet family
  • The approval clears the way for deliveries against nearly 1,500 orders, about 30% of the 737 backlog
  • United Airlines is the largest customer with 167 firm orders; Alaska Airlines holds 105, with Ryanair, Delta and American also major buyers
  • The first MAX 10 rolled out in November 2019 and was originally due to enter service in 2020
  • Delays stemmed from the 2019 to 2020 MAX grounding, tighter FAA oversight, an engine anti-ice flaw and, most recently, a software issue disclosed in September
  • The aircraft seats 185 to 230 passengers with a range of about 3,100 nautical miles

The US Federal Aviation Administration has certified Boeing’s 737 MAX 10, clearing the largest model in the planemaker’s best-selling jet family for customer deliveries after a delay of almost seven years. Transportation Secretary Sean Duffy was scheduled to mark the approval at Boeing’s factory in Everett, Washington, on Tuesday.

The decision unlocks close to 1,500 orders, roughly 30% of Boeing’s total 737 backlog. United Airlines is the largest customer, with 167 firm orders, followed by Alaska Airlines with 105. Ryanair, Delta Air Lines and American Airlines are also significant buyers. The MAX 10 seats between 185 and 230 passengers and flies about 3,100 nautical miles, positioning it against the Airbus A321neo at the top end of the single-aisle market.

The first MAX 10 rolled off the line in November 2019, with service entry originally planned for 2020. The programme was then caught up in the worldwide MAX grounding that followed two fatal crashes, tighter certification standards and closer FAA scrutiny after a door panel blew out of a 737 MAX 9 in flight in January 2024. A flaw in the engine anti-ice system, identified in 2023, added further delay because running the system continuously could overheat the engine inlet.

The final stretch was not smooth either. In late September, Boeing disclosed a software issue that could prevent pilots from using automated flight guidance in a specific landing scenario, and the FAA said it would hold off on approval until the problem was resolved, according to Reuters. Boeing shares fell close to 7% that day. The regulator later allowed certification to proceed while Boeing works on a permanent software update. Flight testing had already been completed in July, after nearly 1,000 flights and more than 2,060 hours in the air.

The approval follows certification of the smaller MAX 7 in August. Boeing said in its most recent quarterly filing that it held about 40 completed MAX 7 and MAX 10 aircraft in inventory at the end of June, and chief executive Kelly Ortberg has said the company expects to work through stored jets of both models over roughly 18 months.

Production capacity is also building. Boeing opened a new 737 line in Everett in July to supplement output in Renton, and is moving its 737 production rate from 42 to 47 aircraft a month, with further increases planned. The new Everett line must be production-certified by the FAA before it can deliver aircraft.

Analysts have long seen MAX 10 deliveries as critical to restoring Boeing’s revenue and cash flow. The company reports third-quarter results on 27 October, when investors will be watching for a firm delivery schedule and any change to its cash flow outlook. 

This article was written by Eamonn Sheridan at investinglive.com.

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