Boeing gets nod to start next phase of 777X certification trials, Air Current reports

Boeing's 777-9 wide-body jet has received FAA approval to commence the third and largest phase of certification flight tests, a crucial development for the long-delayed program. Despite this progress, the 777X program has experienced significant setbacks, pushing first deliveries to 2027 and incurring over $15 billion in charges, which has benefited rival Airbus. Separately, Boeing also secured FAA approval to increase 737 MAX production to 42 aircraft per month.

Analysis

Boeing (BA) has secured Federal Aviation Administration (FAA) approval to commence the third, and largest, phase of certification flight tests for its 777-9 wide-body jet. This development is crucial for the long-delayed 777X program, which is central to Boeing's wide-body strategy. The approval signals progress in a program that has faced significant regulatory hurdles.

Despite this testing milestone, the 777X program continues to be plagued by substantial delays, pushing first deliveries to 2027 and accumulating over $15 billion in charges, including a recent $5 billion charge that exceeded expectations. These setbacks have created a competitive advantage for rival Airbus and its A350, particularly as international travel demand recovers. The ongoing delays exert considerable pressure on Boeing's financial performance.

In a separate, more positive development, Boeing also received FAA approval to increase 737 MAX production to 42 aircraft per month from the previous cap of 38. However, the overall sentiment surrounding BA remains moderately negative (-0.5 per-ticker sentiment), reflecting the cautious tone and the significant financial implications of the 777X program's protracted timeline. The market impact is assessed as moderate (0.6).

Key Decisions for Investors

• Investors should closely monitor the progress of the 777-9 certification tests and any further updates on the 2027 delivery timeline, as continued delays pose significant financial risks and competitive disadvantages.
• Evaluate the long-term impact of 777X delays on Boeing's market share in the wide-body segment, considering Airbus's strengthening position with its A350.
• While the 737 MAX production increase offers a positive catalyst, investors should weigh it against the substantial financial charges and extended delays associated with the critical 777X program.