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Boeing Poised to Win European Approval for 737 Max

The Boeing Co. (NYSE: BA) 737 Max was grounded back in March 2019 after a couple of devastating accidents, but now Europe’s aviation regulator has declared the aircraft safe to fly again. Boeing shares took off on Friday as well.

Patrick Ky, an executive director of the European Union of Aviation Safety Agency (EASA), commented to Bloomberg that the 737 Max has reached a high enough degree of safety to fly again:

Our analysis is showing that this is safe, and the level of safety reached is high enough for us. What we discussed with Boeing is the fact that with the third sensor, we could reach even higher safety levels.

Note that the nod from the EASA is the first from any major regulator. Boeing is obviously looking forward to the U.S. governing body, the Federal Aviation Administration (FAA), to make a ruling soon. The FAA is the main certification body to which Boeing is beholden.

The FAA Administrator Steve Dickson flew the 737 Max late last month and noted that he was “very comfortable,” but the process is yet to be complete.

After the EASA conducted test flights in September, the agency is going through the final document reviews ahead of a draft airworthiness directive that it expects to issue in November.

This will be followed by four weeks of public comment, while the development of a synthetic sensor to add redundancy will take around 20 to 24 months. The software-based solution will be a requirement on the larger Max 10 variants before it makes its debut in 2022, and it will be retrofitted on other versions.

Essentially, the synthetic sensor would simplify the job of the pilots when one or both of the mechanical angle-of-attack sensors on the Max fails. The device looks to solve the problem that caused the crashes in 2018 and 2019. The sensor monitors whether a plane is pointed up or down relative to oncoming air, which is the malfunction that caused both crashes.

Boeing stock traded up about 3% on Friday to $169.25, in a 52-week range of $89.00 to $375.60. The consensus price target is $177.36.

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