Boeing (BA.US) recovers and welcomes new progress: the fourth 737 MAX production line is in operation, MAX 7 certification is in sight

The Zhitong Finance App learned that US aircraft manufacturer Boeing (BA.US) officially opened its fourth 737 Max assembly line near Seattle on Friday to deliver its growing backlog of orders, although the initial production of the new production line will be relatively low.

Boeing senior executive Jennifer Borland-Masterson explained during a media tour that this assembly line is located in the Boeing Everett factory area. The plant mainly produces wide-body models such as the 777, 767, and the upcoming 777X. The new production line will initially absorb about 1,000 employees.

Borland Masterson said that at this stage, Boeing will use a low-speed production model to investigate and resolve various hidden production hazards and ensure the smooth operation of production lines. She did not reveal the specific pace of expansion of this production line, but said that in the future, the recruitment of workers will be gradually expanded as production capacity increases.

This new production line is a key part of Boeing's increase in production of the 737 MAX series. Earlier, due to quality issues revealed by the passenger cabin door falling off incident, the US Federal Aviation Administration (FAA) limited the maximum monthly production capacity of the Boeing 737 MAX aircraft to 38 aircraft in 2024, and Boeing's senior management was also drastically changed.

In May, CEO Kelly Otterberg said the aircraft manufacturer had been approved to increase monthly production to 47 aircraft.

Boeing's ultimate goal is to increase monthly production of 737 to 63 aircraft, which is critical to repaying debts, improving financial conditions, and challenging Airbus' dominance in the lucrative single-aisle aircraft sector.

However, major aircraft manufacturers are still facing many obstacles in expanding production, including shortages of parts and labor due to the pandemic.

Borland Masterson said that as airlines add more flat seats to narrow-body aircraft to attract high-end passengers, the new production line has added additional workstations, enabling staff to install complex internal facilities without affecting other processes.

About 50% of these workers come from Boeing's core 737 Max plant in Renton in south Seattle, and the other half are new employees receiving training at major narrow-body aircraft plants.

Boeing said the first aircraft produced on the new production line was the 737 Max 10, a model that has not yet been certified and will be delivered to WestJet Canada.

Meanwhile, according to media reports, citing people familiar with the matter, the US Federal Aviation Administration (FAA) is expected to approve the 737 MAX 7 aircraft certification later this month, which will be another important milestone for Boeing after getting rid of a series of safety and quality issues. Furthermore, the FAA also anticipates that Boeing will soon restore Boeing's final safety signing (final safety signoff) authority for newly produced 737 aircraft. This permission was revoked after two 737 MAX air crashes in 2019. If MAX 7 is approved, it will benefit Southwest Airlines, one of its biggest customers. According to the latest disclosure documents, Southwest Airlines has ordered 258 737 MAX 7s, but due to delays in certification approval, it has to continue operating a 737-700 fleet with an average age of about 20 years.

Before the US stock market on Friday, as of press release, Boeing's stock price rose 0.4%.