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Boeing shares wobble as WSJ reports potential delays in European regulatory approval for its 737 MAX planes

Disputes over how the MAX’s dual flight-control computers will work together may prolong the vetting process, the paper said

Boeing 737 MAX
Any delay could make a huge difference, the Seattle Times reported, as Boeing is reportedly considering cutting production at or temporarily shutting down its factory in Renton, Washington

The Boeing Company (NYSE:BA) saw its shares flew lower Tuesday after the company’s ongoing process to get its beleaguered 737 MAX jets back in the air reportedly hit another snag.

The Wall Street Journal reported Tuesday that disputes over how the MAX’s dual flight-control computers will work together may prolong the vetting process, citing people familiar with the details. 

Shares of Boeing fell 1.8% to $369.77 in midday trading.

The idea of the dual flight-control computer is to keep planes in the air even in the event of a chip malfunction. The disagreements could mean a lack of support from European regulators even after the Federal Aviation Administration gives Boeing the green light, the people said.

READ: Ryanair boss spares no one in slam on Thomas Cook’s business model, aviation authority and carbon emissions

The European Union Aviation Safety Agency (EASA) reportedly told US regulators that it did not believe Boeing and the FAA had sufficiently demonstrated the safety of the computers, according to people briefed on the discussions, the paper added. 

Boeing is currently finishing tests of the computer system, the source said, and final results haven’t yet been reported to the EASA. This could mean the European organization issues a different ruling than its US counterpart. 

The ambiguity has Boeing officials frustrated, the WSJ reported, because they remain unsure of what objections from EASA could further delay the process. 

“We are very confident in that software solution, and we are now just marching through the final steps on certifying that, so that everybody’s confident in the safety of the airplane,” CEO Dennis Mullenberg was reported as saying at a public appearance in New York last week. 

Any delay could make a huge difference, the Seattle Times has reported, as Boeing is reportedly considering cutting production at or temporarily shutting down its factory in Renton, Washington. For now, newly-produced MAX planes are heading into storage instead of in to the friendly skies.

Separately, the company announced a $20 million investment Tuesday into Virgin Galactic, the commercial spaceflight company founded by Richard Branson. 

In return, Boeing will receive new shares in Virgin Galactic, which plans to go public this year by way of a business combination with Social Capital Hedosophia Holdings Corp (IPOA). 

"Boeing's strategic investment facilitates our effort to drive the commercialization of space and broaden consumer access to safe, efficient, and environmentally responsible new forms of transportation," said Brian Schettler, senior managing director of Boeing HorizonX Ventures.

HorizenX, which made the $20 million investment, serves as Boeing’s venture capital arm.

Contact Andrew Kessel at [email protected] 

Follow him on Twitter @andrew_kessel

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