WASHINGTON - The Federal Aviation Administration (FAA) said on Jan 24 that it would not allow Boeing to expand 737 Max production in the wake of a mid-air emergency on an Alaska Airlines jet, but the Max 9 model involved could return to service after inspections.

The blowout of a cabin panel on Jan 5 led the aviation regulator to ground 171 737 Max 9 jets and resulted in the cancellation of thousands of flights by US carriers Alaska Airlines and United Airlines.

The FAA said the halt to expanding production of Boeing’s best-selling 737 Max narrowbody family was needed to “ensure accountability and full compliance with required quality control procedures” by the plane maker.

Shares of Boeing fell about 4 per cent in after hours trade.

“We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 Max until we are satisfied that the quality control issues uncovered during this process are resolved,” FAA administrator Mike Whitaker said in a statement.

It was not immediately clear how the halt to Max production “expansion” announced by the FAA would affect the company’s detailed near-term production ramp-up plans.

The Max family includes the best-selling 737 Max 8 which is Boeing’s main cash cow. Boeing declined immediate comment.

In October, Boeing chief executive officer Dave Calhoun said the company planned to reach production of 38 Max planes per month by the end of 2023.

“We are keeping our suppliers hot according to the master schedule,” he said at the time.

Boeing’s latest 737 supplier master schedule, which sets the production pace for its supply chain, calls for production to rise to 42 jets per month in February, 47.2 in August, 52.5 by February 2025 and 57.7 in October 2025.

However, Boeing’s own production pace can lag the supplier master schedule.

The FAA on Jan 24 also laid out an inspection and maintenance process so the grounded Max 9 planes could return to service.

“The exhaustive, enhanced review our team completed after several weeks of information gathering gives me and the FAA confidence to proceed to the inspection and maintenance phase,” Mr Whitaker said.

Alaska Airlines said it had received the inspection regime and planned to start sending planes back into service on Jan 26.

US Transportation Secretary Pete Buttigieg on Jan 24 said the Biden administration will undertake a wide-ranging review of oversight and quality control at Boeing after the plane maker’s latest missteps.

The FAA is examining specific manufacturing concerns related to Boeing’s 737 Max 9 aircraft after an incident involving a fuselage section that ripped away from an Alaska Airlines plane in midflight, “but also a bigger picture examination of any and all quality issues,” Mr Buttigieg said.

“I think that’s going to include a structural discussion about how best to conduct this kind of oversight and going forward,” he continued.

The comments signal that Boeing faces long-lasting repercussions from the blow-out of a door plug minutes after the Alaska Airlines jet took off from Portland on Jan 5. Federal regulators have launched far-reaching investigation of Boeing’s control over quality in its factories and supply chain after early clues and a whistleblower’s allegations point to a manufacturing error within the plane maker’s Renton, Washington plant.

Mr Buttigieg spoke to reporters a day after Mr Whitaker said his agency was evaluating whether there were systemic issues at Boeing. A broader inquiry could further pressure the aviation giant, which has faced intensified scrutiny since a pair of fatal crashes to the Max lines in 2018 and 2019.

Mr Buttigieg added that “right now everything is on the table” to make sure that the design and manufacturing of Boeing aircraft was as strong as it could be.

Earlier on Jan 24, Boeing chief executive David Calhoun said that he believed the current questions around the company’s planes could be resolved in “days and weeks, not months” after meeting lawmakers on Capitol Hill. 

His remarks came after Alaska Airlines CEO Ben Minicucci said that his airline’s internal inspection of the planes uncovered “many” of the aircraft had loose bolts – an issue also reported by United Airlines.

“I’m angry. I’m more than frustrated and disappointed. I am angry,” Mr Minicucci told CNN, adding that he wanted Boeing to explain “what are they going to do to improve their quality programmes in-house.” 

After meeting Mr Calhoun, Senator Maria Cantwell, the Democrat from Washington who heads the Senate Commerce Committee, said she would hold hearings “to investigate the root causes of these safety lapses.”

China delivery a sign of good news

In a rare bit of positive news for Boeing, it delivered its first 737 Max to a Chinese airline since March 2019 on Jan 24, flight data showed, ending an almost five-year freeze on imports of the US plane maker’s most profitable product in a respite for severely strained trade relations between the world’s two largest economies.

The delivery symbolises the re-opening of doors to China, one of the fastest-growing aerospace markets, which the company projects will account for 20 per cent of the world’s aircraft demand through 2042.

It was China that was initially the most aggressive in responding to a pair of fatal crashes in 2018 and 2019 of Max planes that killed nearly 350 people. Regulators in that country grounded the jets before other national regulators, and while safety bans had been lifted with existing Max already flying inside China, new deliveries had remained on hold. REUTERS, BLOOMBERG