Shares in beleaguered airplane maker Boeing Co. and Texas-based Southwest Airlines soared Monday as investors responded to multiple media reports that Boeing has received the green light from the Federal Aviation Administration to begin test flights of its grounded 737 MAX aircraft, the workhorse of the Southwest fleet, as early as Monday to certify fixes needed following two fatal crashes that resulted in the plane’s grounding in March 2019.
- Boeing shares closed Monday up 14.40 percent to $194.49 and shares of Southwest gained 9.64 percent to $35.04, as investors viewed the FAA’s test blessing as a crucial step in the plane’s eventual return to service.
- Even with the gains, the shares have a ways to go to make up for a year of losses with Boeing trailing its year-ago stock price by 45.4 percent and Southwest down by about a third.
- The troubled passenger jet has been grounded by transportation officials across the globe for more than a year, following fatal crashes in late 2018 and early 2019 that killed 346 people.
- The grounding, and the near-ubiquitous halt to air travel in the early days of the global coronavirus pandemic, has left Boeing scrambling for cash and left Dallas-based Southwest, the largest owner of 737 Max jets, without the capacity to handle what last year was growing travel demand.
- In a move that boosted spirits at Boeing and among investors, a Boeing 737 MAX was set to take off Monday afternoon from a Seattle airport on the first day of certification flight testing with FAA test pilots, a crucial moment in its worst-ever crisis, company and government officials confirmed to Reuters.
- On its website, Boeing listed a “certification flight test,” as one of five crucial steps the company needs to take before the plane can return to service.
Boeing’s 737 Max aircraft was grounded in March 2019, after 346 people were killed in two crashes: Lion Air Flight 610 on October 29, 2018 and Ethiopian Airlines Flight 302 on March 10, 2019. No airline needs the successful return of the 737 Max more than Southwest. The Boeing 737 is the only aircraft that Southwest flies, and the 737 Max is the only airplane that it has on order. Southwest has been unable to use its 34 737 MAX aircraft since March 2019 and argues that it lost $828 million in operating profit in 2019 because of the plane groundings.