Boeing maintains 737 MAX return in December, but challenges remain
Boeing continues to focus on re-certifying the 737 MAX before the end of the year, even as obstacles to return the grounded jet to the sky remain.
The Chicago-based airframer is making "daily progress" on re-certifying the MAX, including delivering a second software update to regulators, Boeing CEO Dennis Muilenburg said during a third-quarter earnings call on Wednesday.
At the same time, Muilenburg acknowledged that the software work had slipped from September into the fourth quarter as the review process was taking "a little longer than planned." The next major milestone for the MAX will be a test flight with U.S. Federal Aviation Administration (FAA) authorities onboard.
In addition, Muilenburg acknowledged that the return of the MAX may be phased, with regulators in different countries re-certifying it at different times.
“There are tangible milestones being achieved but we still have more work to do," he said.
Boeing saw revenues fall by more than 20% to $20 billion in the third quarter, citing the impact of the on-going MAX grounding on earnings. The airframer has cut production of the aircraft to 42 per month until deliveries can resume and, facing challenges abroad, will cut 787 production rates by two aircraft to 12 per month.
Related: Boeing misses third-quarter expectations amid MAX grounding
Once the FAA re-certifies the MAX, Boeing expects the process of updating all of the stored aircraft -- estimated at around 700 737 MAXes worldwide -- and putting them into service to be a “multi-quarter operation” that could take up to a year, said Muilenburg.
Airlines have already built this gradual return-to-service timeline into their expectations. American Airlines and United Airlines have returned the MAX to their schedules from January, while Air Canada and Southwest Airlines have done so from February.
Executives at the affected carriers have said they expect to gradually return the MAX to service, at least partially alleviating concerns of a significant jump in capacity during the low-demand winter season.
Analysts agree with Boeing's assessment that the MAX will be re-certified by the end of the year. Cowen analyst Cai von Rumohr wrote Friday that they expect deliveries to "resume in mid/late December," with U.S. airlines resuming flying in early 2020.
Rumohr noted that, in addition to FAA and pilot approval of the MAX fixes, the proposed re-certification must stay open for public comment for 15 days before it can be finalized by the regulator.
Boeing continues to work closely with airlines on both the MAX software updates as well as what they expect will be needed for the aircraft to return to the air, said Muilenburg. This includes having airline pilots independent from Boeing come in to test both the software and the any training updates as part of the re-certification process.
The final guidelines and timeline for the 737 MAX's return will be set by the FAA and global regulators, he added.
Boeing continues to be rocked by the fall out from the MAX grounding. The airframer ousted the head of its Commercial Airplanes business on Tuesday, and stripped Muilenburg of his role as chairman earlier in October.
Related: Boeing axes commercial airplanes CEO in first management change since 737 MAX grounding
At the same time, orders for new Boeing aircraft have slowed. The airframer landed orders for just 34 aircraft, including finalizing an earlier commitment from Korean Air for 20 more 787s, in the third quarter.
"The lack of orders from China has put pressure on the production rate," said Muilenburg on the cut in 787 production which will occur in late 2020.
Development of the 777X, Boeing's next big commercial project after the MAX, has also slowed. First flight is still scheduled for early in the new year but the first delivery to Lufthansa, which was due later in 2020, has slipped to 2021.
Related: Boeing Confirms Its Updated 777X Wide-Body Won’t Fly Until Next Year
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.