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MarketScreener Homepage  >  Equities  >  Nyse  >  Boeing Company (The)    BA


Delayed Quote. Delayed Nyse - 11/22 04:02:18 pm
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Boeing : European Air Regulators Break From FAA on 737 MAX Timeline -- Update

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10/21/2019 | 04:42pm EST

By Andy Pasztor and Andrew Tangel

European air-safety regulators have officially shelved the idea of lifting the grounding of Boeing Co.'s 737 MAX jets simultaneously with the U.S., according to people familiar with the details, a significant setback to American regulators' desire for a coordinated global response.

The final decision, these people said, was communicated last week by Patrick Ky, head of the European Union Aviation Safety Agency, to Earl Lawrence and Ali Bahrami, the two senior Federal Aviation Administration officials leading the U.S. response to the MAX crisis.

Results of the meeting, which hasn't been reported before, are both symbolic and practical. Symbolically, they undercut the FAA's stature among its international counterparts when it comes to certifying aircraft as safe. In a more concrete sense, the results undermine the FAA's goal of securing the broadest possible global cooperation to vouch for the safety of the currently grounded fleet.

Boeing's stock fell nearly 4% on Monday, declining for the third straight session as analysts downgraded the shares amid increasing scrutiny from regulators and uncertainty about the timing of the MAX's return.

After months of roller-coaster negotiations -- with changing deadlines and shifting commitments by EASA -- FAA leaders have been told their European counterparts will take perhaps as much as four weeks longer than the U.S. to allow the MAX back into service, these people said.

EASA so far has coordinated its efforts with FAA testing and analyses of software fixes and flight-control computer changes. That is typical, as air regulators normally follow the lead of whatever country initially approved a plane for service. But going forward, a number of these people said, European regulators intend to conduct some of their own independent simulator tests. Mr. Ky, they said, also told the FAA officials he will need extra time to inform and gain support from European legislators and national aviation authorities within the EU.

An EASA spokeswoman declined to comment on the European-U.S. rupture, except to say "we would like to see the MAX return to service as soon as possible, but only once we are confident it is safe."

An FAA spokesman said the agency, which hasn't set a deadline for getting the fleet back in the air, "has a transparent and collaborative relationship with other civil-aviation authorities."

The agency also said "each government will make its own decision to return the aircraft to service based on a thorough safety assessment."

A Boeing spokesman said it is cooperating with the FAA-led effort, but " each of the regulators will determine on their own timeline when they will certify the MAX."

Beyond the regulatory and operational headaches if MAX jetliners initially can fly only on one side of the Atlantic, EASA's decision to opt out of the coalition might have broader impact. Regulators in China and other fast-growing aviation markets, industry officials said, will be assessing whether they should follow the lead of the FAA or EASA.

"It's going to take a very deft hand at the top of the FAA to show the necessary respect for [EASA's] independence, while setting the stage for future enhanced cooperation," former FAA chief Marion Blakey said in an interview.

The EASA pullout adds to challenges facing Boeing, MAX operators and passengers. Boeing is considering whether to further cut, or even temporarily halt, production as finished planes pile up and the company is unable to deliver them to customers. Technical issues and other problems have resulted in months of delays for FAA permission to resume MAX flights.

For airlines, Europe's stance might complicate plans to reassure customers if the FAA gives the green light but a major world regulator doesn't fully and promptly agree the MAX is safe to fly.

If EASA doesn't certify the planes at the same time as the U.S., the FAA will be ready to act and "I've been told by at least one of the U.S. airlines at that point, they would fly," said Rep. Peter DeFazio of Oregon, Democratic chairman of a House committee scheduled to question Dennis Muilenburg, Boeing's chief executive, later this month.

The EU's decision comes as Boeing is getting ready to turn over to the FAA its final package of MAX software fixes, according to one of the people familiar with the discussions. It could come as early as this week or next, this person said, though previous deadlines have slipped repeatedly and the situation remains fluid.

At the same time, friction between the FAA and the plane maker has escalated as a result of the recent public release of messages between two Boeing pilots, apparently flagging safety concerns over an automated flight-control system called MCAS. Agency leaders blame Boeing for failing to promptly turn over to them messages; problems with the system under discussion subsequently led to two fatal MAX crashes that took a total of 346 lives in less than five months. Boeing has said the company didn't believe it was appropriate to share the documents with the FAA sooner because of a continuing criminal investigation.

EASA's latest strategy comes at a precarious time for Boeing, as it grapples with stepped-up congressional criticism over the memos, a sharp drop in its share price and added uncertainty about the timing of approvals to return the planes to the skies.

Internal FAA estimates have the agency issuing a directive lifting the grounding across the U.S. by year-end. Pilot training, maintenance and other required preparations by airlines to resume carrying passengers are expected to stretch over a number of additional weeks. U.S. carriers have removed the jets from their schedules until after the holiday season. The union representing pilots at Southwest Airlines Co., the largest MAX operator, has said the planes aren't likely to return until February at the earliest.

Based on EASA's projection, the agency wouldn't issue a directive ungrounding the jets until January, and airlines and union officials have said the bulk of the European fleet might not fly until early spring.

Canadian and Brazilian authorities are expected to unground the planes in conjunction with the FAA, though Canadian regulators have signaled they are likely to mandate extra simulator training in addition to the nonsimulator training the FAA is expected to mandate.

Write to Andy Pasztor at andy.pasztor@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

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Financials (USD)
Sales 2019 80 564 M
EBIT 2019 2 006 M
Net income 2019 1 851 M
Debt 2019 17 249 M
Yield 2019 2,15%
P/E ratio 2019 129x
P/E ratio 2020 16,5x
EV / Sales2019 2,81x
EV / Sales2020 1,77x
Capitalization 209 B
Duration : Period :
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Technical analysis trends BOEING COMPANY (THE)
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 387,73  $
Last Close Price 371,34  $
Spread / Highest target 40,3%
Spread / Average Target 4,41%
Spread / Lowest Target -21,9%
EPS Revisions
Dennis A. Muilenburg President, Chief Executive Officer & Director
David L. Calhoun Non-Executive Chairman
Jenette E. Ramos Senior Vice President-Supply Chain & Operations
Gregory D. Smith CFO, EVP-Corporate Development & Strategy
Gregory L. Hyslop CTO, Senior VP-Engineering, Test & Technology
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