FAA clears 737 MAX 10, releasing almost 1,500 Boeing jet orders

With shares having dropped almost 7% in late September after a software fault delayed the green light, certification lifts one of the biggest clouds hanging over Boeing's stock. The larger financial benefit is cash flow: Boeing has dozens of finished but undelivered MAX 7 and MAX 10 aircraft, and moving those from inventory to customers should help generate cash in the next year or more. Investor focus turns to Boeing's third-quarter report on 27 October, where a delivery timetable and any revision to cash-flow guidance will be watched. For Airbus, the decision closes out a stretch in which the A321neo had no direct competitor at the high end of the single-aisle market.

Arriving seven years behind schedule and following a software scare, the A321neo rival from Boeing is now cleared for flight, along with a substantial order pipeline the company can finally begin converting into cash.

Summary:

• On Tuesday, the FAA issued final certification for the 737 MAX 10, the biggest member of Boeing's top-selling jet line.
• That clearance lets Boeing begin deliveries tied to close to 1,500 orders, roughly 30% of the 737 order book.
• United is the top buyer at 167 firm orders, while Alaska has 105; Ryanair, Delta Air Lines and American Airlines are substantial customers too.
• The first MAX 10 came off the line in November 2019 and was initially slated to start flying commercially in 2020.
• Setbacks included the 2019-2020 MAX grounding, more rigorous FAA oversight, an engine anti-ice defect and, latest, a software problem revealed in September.
• The jet carries 185 to 230 passengers over roughly 3,100 nautical miles.

Boeing's 737 MAX 10 has received certification from the US Federal Aviation Administration, paving the way for customer deliveries of the biggest version of the manufacturer's best-selling jet family nearly seven years after it was originally expected. Transportation Secretary Sean Duffy was due to commemorate the certification on Tuesday at Boeing's Everett, Washington, plant.

Close to 1,500 orders, about 30% of the overall 737 backlog, are now freed up by the decision. With 167 firm orders, United Airlines tops the customer list, and Alaska Airlines follows with 105. Ryanair, Delta Air Lines and American Airlines are also meaningful customers. The MAX 10 cabins hold 185 to 230 passengers and the jet can fly roughly 3,100 nautical miles, putting it up against the Airbus A321neo in the upper single-aisle segment.

The initial MAX 10 left the production line in November 2019, and entry into service was initially set for 2020. Then came the global MAX grounding after two deadly crashes, stricter certification requirements and intensified FAA oversight following the January 2024 inflight blowout of a door panel on a 737 MAX 9. A problem found in 2023 with the engine anti-icing system also pushed things back, since leaving it running non-stop could overheat the engine inlet.

The closing phase had its own turbulence. In late September, Boeing disclosed a software defect that could block pilots from using automated flight guidance in one particular landing situation, and the FAA said approval would wait until a fix was found, Reuters reported. Boeing's stock dropped almost 7% that day. The FAA subsequently let certification go ahead while Boeing develops a permanent software patch. Flight tests had already wrapped up in July, following close to 1,000 flights and more than 2,060 flight hours.

Certification of the MAX 10 comes after the smaller MAX 7 received approval in August. In its latest quarterly filing, Boeing stated it had roughly 40 finished MAX 7 and MAX 10 jets in stock as of the end of June, and chief executive Kelly Ortberg has said he expects the stored aircraft of both types to be worked through over about 18 months.

Manufacturing capacity is expanding as well. Boeing added a second 737 assembly line in Everett in July to support Renton's output, and is raising monthly 737 production from 42 to 47 jets, with more increases in mind. The Everett line still needs FAA production certification before deliveries can start from it.

For analysts, MAX 10 deliveries have long been viewed as central to rebuilding Boeing's revenue and cash flow. Third-quarter numbers are due on 27 October, with investors looking for a definite delivery schedule and any shift in the cash-flow outlook.