Boeing says 737 MAX approval delays could hit production

SEATTLE (Reuters) – Significant additional regulatory requirements or delays in returning Boeing Co’s (BA.N) 737 MAX to commercial service could cause it to cut or temporarily halt production of the aircraft, it said in an Oct. 18 letter released on Thursday.

In its letter to the U.S. Securities and Exchange Commission, Boeing said it does not expect 737 MAX order cancellations due to the grounding of its best-selling single-aisle jet to have a material impact on revenues or earnings.

It cited the size of the 737 order backlog and its ability to shift planned customer delivery dates.

Boeing’s letter was a response to requests from the SEC to clarify the company’s comments in earlier financial filings on the 737 MAX grounding related to revenue and production.

The correspondence was released on the Edgar filing system on Thursday.

Boeing, the world’s largest planemaker, is trying to rebuild trust with customers, regulators and the flying public in the wake of twin 737 MAX crashes in the span of five months that killed 346 people.

Boeing has said extra delays or a cut in production are possible as regulators around the world evaluate the 737 MAX, including Boeing’s proposed upgrade of software at the center of both crashes and complementary training materials.

Boeing said last month that it expected the Federal Aviation Administration would lift the grounding around mid-December, though it did not expect the agency to complete its review of revised training requirements until January.

In the October letter, Boeing also said it does not expect a shortage of space to store parked 737 MAX jetliners – which continue to roll out of a its Seattle-area factory – would limit its ability to continue their production.

The contents were released a day after Boeing wrapped up two days of meetings with consultants, pilots and other “select aviation leaders” it hosted in the Seattle area to discuss 737 MAX preparations, according to an invitation seen by Reuters and one person who attended the meetings.

Events included a demonstration in a flight simulator, meetings with Chief Executive Officer Dennis Muilenburg and other Boeing executives, and a tour of the 737 factory in Renton, south of Seattle, the person added.

Media were not invited to the two-day summit. Boeing was planning a separate session with journalists at a later date, a Boeing spokesman said.