737 Max software fix, already been tested by airlines


737 Max software fix, already been tested by airlines.

Boeing stock jumped at the very end of trading on Thursday, after CEO Dennis Muilenburg said during remarks in Texas that a fix for the company’s troubled 737 MAX jet has already been tested by airlines.

Boeing stock (ticker: BA) closed up 1.4% for the day, with the share price jumping $5 in the closing minutes of trading after Muilenburg spoke, to $370.16. It was still rising slightly in after-hours trading. Boeing stock is now down 11.5% since the second deadly crash of a 737 MAX jet in five months—compared with a 3.5% rise for the Dow Jones Industrial Average over the same span.

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The back story. Most Wall Street analysts believe that the 737 MAX will be out of service till at least September. The new single-aisle jets have been grounded since March 13, following the second accident linked to its new maneuvering characteristics augmentation system, or MCAS. Final crash reports have yet to be issued by investigating authorities, but Boeing has been focused on updating MCAS software since the downing of a Lion Air jet in October. That was followed by an Ethiopian Airlines crash in March.

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What’s new. Muilenburg told an assembled audience at an event in Dallas that pilots and leaders from two-thirds of Boeing’s 737 MAX customers have participated in simulator sessions with the updated MCAS software.

“The update will make the 737 MAX even safer by preventing erroneous angle of attack sensor readings from triggering the Maneuvering Characteristics Augmentation System,” Muilenburg said.

Muilenburg’s comments, some of his first since saying an MCAS software fix would be ready in coming weeks, will allay investor fears that correcting the 737 MAX problems could stretch into a lengthier ordeal than Boeing initially expected.

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Looking ahead. Muilenburg’s confidence is important for the stock. He adhered to the original timeline, which lowers the risk of another 737 MAX production slowdown.

“Our team has made 96 flights totaling a little over 159 hours of airtime with the updated software,” Muilenburg said, adding: “We look forward to completing near-term milestones on the path to final certification.”


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