Boeing NYSE:BA, a major U.S. aircraft manufacturer, is expected to secure Federal Aviation Administration certification for its 737 MAX 7 later this month, potentially marking another step in the company's recovery from years of safety and quality problems. The MAX 7 is the smallest aircraft in Boeing's single-aisle MAX lineup, and its long-awaited approval could help the company move closer to delivering more jets to customers facing extended delays. Investors may view the expected certification as an important regulatory milestone as Boeing continues working to rebuild confidence and increase production.
The FAA is also expected to soon restore Boeing's authority to conduct final safety signoffs on newly produced 737 aircraft. The regulator removed that privilege in 2019 after two fatal crashes involving a larger version of the MAX. Restoring the authority could give Boeing greater control over the final stages of aircraft delivery, although the company would remain under regulatory oversight as it seeks to meet strong demand for new passenger jets.
Southwest Airlines NYSE:LUV, a U.S. airline that operates only Boeing 737 aircraft, could be a major beneficiary after ordering 258 MAX 7 jets, according to recent securities filings. Delays to the aircraft have forced Southwest to keep its older 737-700 planes in service longer than planned, with those jets averaging 20 years of age. Boeing is also expanding its manufacturing capacity, having opened a new 737 MAX production line earlier this week in Everett, Washington, at a facility that previously produced other aircraft models but had been idle.