Boeing shares pop as European regulators prepare for the ungrounding of the 737 Max

November 24, 2020, 2:00 PM UTC

Boeing’s share price rose more than 4% in pre-market trading after European aviation regulators signaled an imminent return to the skies for the currently-grounded 737 Max.

On Tuesday morning the EU Aviation Safety Agency (EASA) published its draft approval for an end to the aircraft’s forced hiatus, which has lasted nearly two years—the 737 Max was grounded worldwide in 2019 following a pair of crashes that killed hundreds of people.

The move is now subject to a 28-day consultation period, meaning the plane could be formally ungrounded in mid-January. However, EASA first wants changes made to the aircraft that are mostly in line with those demanded last week by the U.S. Federal Aviation Administration (FAA).

The FAA also cleared the Boeing aircraft for service, leaving China’s aviation authority as the big hold-out on that front.

“Objective and independent”

“EASA made clear from the outset that we would conduct our own objective and independent assessment of the 737 Max, working closely with the FAA and Boeing, to make sure that there can be no repeat of these tragic accidents, which touched the lives of so many people,” said EASA Executive Director Patrick Ky in a statement.

The accidents were primarily caused by the 737 Max’s Manoeuvring Characteristics Augmentation System (MCAS), which was supposed to make flying easier but—when handling readings from a faulty sensor—repeatedly pushed down the nose of the aircraft. Many pilots were also not informed of MCAS’s existence, and the doomed planes did not have a caution light to warn them of the sensor problems.

So, like the FAA, EASA wants Boeing to update the MCAS and other piece of software in the flight control computer, alter the plane’s wiring, update flight manuals, and train all 737 Max pilots before they can fly it again.

“We took a decision early on to review the entire flight control system and gradually broadened our assessment to include all aspects of design which could influence how the flight controls operated,” said Ky.

“This led, for example, to a deeper study of the wiring installation, which resulted in a change that is now also mandated in the Proposed Airworthiness Directive. We also pushed the aircraft to its limits during flight tests, assessed the behavior of the aircraft in failure scenarios, and could confirm that the aircraft is stable and has no tendency to pitch-up even without the MCAS.”

Minor differences

Keeping the changes aligned with those demanded by the FAA means U.S. carriers and airlines based in EASA member states (the EU, plus Iceland, Liechtenstein, Norway and Switzerland) won’t have differing specifications for their planes.

However, the European regulator is also maintaining what is expected to be a short-term restriction on using the aircraft’s autopilot for “certain types of high-precision landings.” Unlike the FAA, EASA has also explicitly said flight crews can “intervene to stop a stick shaker from continuing to vibrate once it has been erroneously activated by the system, to prevent this distracting the crew.”

The ungrounding will of course take place in the middle of a pandemic that is raging across the world, despite the imminent prospect of vaccines that should bring it to an end. Coronavirus restrictions have hammered the aviation sector, leading many carriers to pause or cancel their orders for new planes.

However, some airlines are already queuing up to get more 737 Max planes into their fleets. Alaska Airlines said Monday that it will swap out some of its Airbus A320s for the more fuel-efficient Boeing offering, and on Tuesday Ireland’s Ryanair said it hoped to place additional orders for the 737 Max late this year or in early 2021.