By Scott Hamilton
Jan. 14, 2020, © Leeham News: Boeing likely faces an extended timeline to clear its inventory of 400 737 MAXes. LNA estimates it will be well into 2022 before these new-production airplanes are delivered to customers.
The new timeline is based on LNA discussions with key people and our analysis. Boeing won’t comment. Wall Street analysts so far haven’t significantly shifted their forecasts of 3Q or 4Q2021.
The decision last year by the Federal Aviation Administration to assume responsibility to certify each Boeing 737 MAX before delivery is key to LNA’s estimate.
Boeing hasn’t made any public forecast, other than a few references in the middle of last year in which it talk about “several quarters” would be required.
Some Wall Street analysts believe Boeing can deliver 25 of the stored airplanes a month. Analysts typically gain some guidance from Boeing’s Investor Relations office before publishing a note.
The FAA decision to assume responsibility immediately raised questions about the number of airplanes it will be able to process. An FAA spokesman at the time wrote LNA that it has the resources to meet Boeing’s delivery schedule. The spokesman did not specify this schedule.
However, a person with direct knowledge of the plans says the FAA has only 10 inspectors, who will work Monday-Friday from 8am to 4pm. LNA has one report that the FAA now has arranged for 50 inspectors, but the person with direct knowledge can’t confirm this.
Boeing’s certification team, on the other hand, includes 500 people who would work 24/7.
Boeing expects the FAA to be especially meticulous.
The planes each will have to go through detailed inspection after months of storage. Test flights by Boeing and the customer are routine. Squawks identified have to be resolved and, if necessary, an additional test flight performed.
The entire process, called flow, normally takes about eight days, LNA is told. With the FAA assuming control on its own workday/weekday schedule and with only 10 inspectors, the flow could increase to 13-14 days per airplane.
“It will take well into 2022 to clear the inventory,” LNA is told. “The process will really be slow. Boeing’s reputation with the FAA is damaged.”
There have been published reports that it will take about 100 man hours to ready each undelivered MAX for handover to the customer. This is characterized to LNA as “conservative.”