The world’s most profitable aircraft manufacturer has announced it will halt production of its 737 MAX aircraft rom January.
The jet has been grounded worldwide since March following two fatal plane crashes involving Lion Air and Ethiopian Airlines which killed a combined 346 people.
The decision by Boeing to pause production comes after the Federal Aviation Administration (FAA) determined its review of the aircraft series – the manufacturer’s best-selling – will continue into the new year.
“The decision to suspend 737 MAX production was based on a thoughtful assessment of a variety of factors,” Muilenburg said in a tweet.
“We are keeping our employees, customers and supply chain top of mind as we prioritise safely returning the MAX to service.”
Boeing said it does not plan to layoff or furlough employees at its Renton, Washington factory – where the 737 MAX is produced – during the pause in production.
The manufacturer added that it plans to have affected employees continue 737-related work or temporarily re-assign them to other teams in Puget Sound.
Boeing has been seeking approval for the return to service of the 737 MAX since late March, after its anti-stall software was embroiled in two fatal crashes. The manufacturer has not halted production on the jet in all that time and has continued selling it.
Warning signs have, however, been prevalent. Boeing president and CEO Dennis Muilenburg in July warned investors that a halt to production was possible, following an historic loss in its second-quarter results.
Throughout the grounding of the 737 MAX, Boeing has continued to build new airplanes, with approximately 400 in storage, and recently unveiled the largest member of the aircraft series, the MAX 10.
Currently, the MAX 10 has more than 550 orders and commitments from customers.
“We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected,” Boeing said in a statement.
“As a result of this ongoing evaluation, we have decided to prioritise the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month.”
The aircraft manufacturer will release financial information regarding the production suspension in connection with its fourth quarter 2019 earnings release in late January.
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