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Report: Boeing May Decide To Halt 737 Max Production


Boeing may announce a decision on Monday whether to further cut or suspend production of the 737 Max aircraft amid growing uncertainty over the aircraft's return to service, the Wall Street Journal reported, citing people familiar with the matter.

Shares of Boeing were losing almost 4 percent in Monday's pre-market activity.

According to the report, Boeing's management views halting production to be the most viable among difficult options.

Boeing's production plans have become more urgent as the U.S. Federal Aviation Administration indicated it would not certify the revamped Max aircraft this year, the WSJ reported. However, cutting production would result in higher costs and further charges for Boeing in addition to potential job cuts.

Boeing has been reeling under the impact of the two crashes related to the 737 Max, its best-selling aircraft.

The aircraft were grounded by airlines worldwide in March this year following two deadly crashes within a short span of five months that killed a total of 346 people.

An Ethiopian Airlines aircraft crashed on the outskirts of Ethiopia's capital city Addis Ababa in March, killing all 157 people on board. It was the 737 Max's second accident in five months after 189 people were killed on a Lion Air flight in Indonesia in October last year.

Following the second fatal crash of the Max aircraft, Boeing cut the aircraft's production by 19 percent to 42 aircraft a month in April this year.

Airlines such as American Airlines and Southwest Airlines that are major customers of the Boeing 737 Max aircraft are also taking a financial hit from the grounding of the aircraft and have sought compensation from Boeing for the damages.

Boeing said in November it was hoping to resume deliveries of the 737 MAX aircraft to airline customers in December, when the FAA is expected to issue an Airworthiness Directive rescinding the grounding order following certification.

However, the FAA later said it has not completed its review of the 737 Max aircraft design changes and associated pilot training. The agency added it will not approve the aircraft for return to service until it has completed numerous rounds of rigorous testing.

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