Boeing says 737 MAX may not win approval to return until mid-year, shares drop

WASHINGTON (Reuters) – Boeing Co (BA.N) said on Tuesday it does not expect to win approval for the return of the 737 MAX to service until mid-year due to regulatory scrutiny on its flight control system.

Boeing has informed airlines and suppliers of the new estimate, it said, which was reported earlier on Tuesday by CNBC.

Boeing shares fell 5.5% to $306.23 before being halted ahead of the announcement.

Reuters reported last week that regulators had been pushing back the time needed to approve the plane. Boeing’s best-selling plane has been grounded since March after two fatal crashes killed 346 people in five months.

The Federal Aviation Administration did not immediately comment.

Reuters reported on Monday that Boeing is in talks with banks about borrowing $10 billion or more amid rising costs for the U.S. planemaker after the two crashes involving the 737 MAX.

Boeing confirmed on Monday that it temporary halted production of the 737 MAX in Washington state in recent days. The company had said in December it would halt production at some point this month.

Boeing has estimated the costs of the 737 MAX grounding at more than $9 billion to date, and is expected to disclose significant additional costs during its fourth-quarter earnings release on Jan. 29. Boeing faces rising costs from halting production of the plane this month, compensating airlines for lost flights and assisting its supply chain.