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According to Boeing, 737 Max planes production has begun “at a low rate”, and will gradually ramp up. Amid the news, Boeing (BA) stock has soared.
On Wednesday, the largest global aerospace company Boeing Company (NYSE: BA) announced the return to the production of its 737 Max planes. Currently, Boeing is also waiting for the Federal Aviation Administration (FAA) certification to allow the aircraft to resume flying. Meanwhile, Boeing (BA) is in the green.
Boeing 737 Max
Earlier, 737 Max aircraft was often in trouble. After two fatal crashes that claimed the lives of 346 people, 737 Max planes were prohibited from flying. The crashes that occurred within five months of each other cast doubts among the aviation community. As a result, a great number of 737 Max orders were canceled.
The situation for Boeing was complicated by the coronavirus pandemic that made the company suspend operations at its facilities in South Carolina.
Later, Boeing said it would resume the production in May, admitting that the process would not be an easy one.
According to Boeing’s post, 737 Max planes production has begun “at a low rate”, and will gradually ramp up.
Walt Odisho, vice president and general manager of the 737 program, commented:
“We’ve been on a continuous journey to evolve our production system and make it even stronger. These initiatives are the next step in creating the optimal build environment for the 737 MAX.”
It is not yet clear when the FAA will certify the planes as safe to fly again. FAA said:
“Work on the project continues, as does our steadfast refusal to speculate on a timeframe for completing it.”
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Boeing Cutting Jobs
As the demand for new planes is low, Boeing has decided to cut costs. This week, the company will lay off 6,770 employees as a part of the plan to cut 16,000 total jobs or 10% of its total staff. In the coming weeks, Boeing will lay offer to leave voluntarily other 5,520 workers.
Boeing CEO David Calhoun commented:
“The Covid-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices.”
The layoffs will mainly take place in the Seattle area.
Boeing (BA) Stock
Amid the news about resuming to 737 Max planes production, Boeing (BA) stock went up. Yesterday, it added 3.37% to end at $149.52 and rose by another 2.93% to $153.90 after hours. In the pre-market today, Boeing stock has soared by 5.42% to $157.63 per share.
The Boeing 52-week highest stock price is $391.00, the 52-week lowest is $89.00. Because of the coronavirus pandemic, Boeing shares are 54.10% down this year.