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Boeing's 737 Max will fly again -- but no one knows when

American Airlines extends grounding 737 Max 8 jets
  • Winning approvals from international regulators -- and pilots -- is key to getting the 737 Max fleet back in the air.
  • Meantime, Boeing keeps working on a software update to eliminate a suspected cause of two deadly crashes.
  • It has also suspended share buybacks and pulled its 2019 financial forecasts amid halted deliveries.
  • The 737 crisis is sparking calls for Boeing to split the roles of CEO and chairman of the board.

When will Boeing be able to return to its high-flying days of massive share buybacks and profit gains after two deadly crashes grounded the latest version of its most profitable aircraft line, the 737 Max? Executives at the aerospace giant said this week they don't yet know. Meantime, work continues on updating software linked to a possible cause of the disasters that took 346 lives.

Boeing is reluctant to outline even a rough timetable at least partly because aviation regulators worldwide -- led by the U.S. Federal Aviation Administration -- will be the ones determining it. The company doesn't want to risk public, airline industry or regulatory ire by announcing a timeline first, airline experts said. Plus, the relationship with Boeing and the FAA has come under intense scrutiny following the two recent crashes.

"We want to make sure we can get back up and flying safely, and we know we have some work to do to earn and re-earn the trust of our customers and the flying public in particular," CEO Dennis Muilenburg said on a call with analysts to discuss Boeing's latest quarterly results. Though Boeing declined to give a timetable, Reuters this week reported the company hopes to have the software approved by May and the planes back in action by July, citing sources it didn't name. 

"It really comes down to the pilots"

Pilot approval may be key to a passenger's decision to step back on the 737 Max aircraft, Muilenburg said. Airline analysts and experts echoed that sentiment.

"It really does come down to the pilots," aviation consultant Richard Aboulafia of Teal Group told CBS MoneyWatch. It's good that Boeing "changed their tune. They were clammed up. Over the past few weeks they've really changed, hopefully they keep changing. And a key to that is what pilots say and getting them on board, finally."

Boeing has made 135 test flights using revamped software as it works toward regulatory approval, the company said. In the two deadly crashes, faulty information from a sensor caused anti-stall automation to kick in and push the planes' noses lower. Pilots were unable to restore normal flight and save the planes.

Boeing cutting production of grounded 737 Max jets

The software issue wasn't a technical one, Muilenberg said on the call. Rather, both accidents were "a series of events, and that is very common to all accidents" through information "that came into the airplane from multiple causes," he said. So the pilot "voice is very important" in reestablishing trust from the flying public, airlines and regulators, Muilenburg said. 

Pilots are "fully engaged" in reviewing the accident reports with Boeing and the FAA, the Air Line Pilots Association told CBS MoneyWatch. "Any decision on changes to training will be data-driven, and there has been no final determination," the ALPA's United Master Executive Council said in an e-mailed statement. "We continuously train in the simulator, classroom and via computer-based devices, and will embrace any new training that is deemed necessary to safely return the MAX to our skies."

Billions more in costs likely

Boeing's first-quarter results were blunted by $1 billion in costs tied to the 737 Max's grounding, slowed production and halted deliveries. The company pulled its forecasts for 2019 and temporarily halted its massive share buyback program until it knows the timing of returning its most profitable aircraft to the skies.  

Boeing isn't cutting its workforce, even after paring back production to 42 of 737 Max models per month from 52. That's to ensure expert employees will be ready to work when production resumes, Chief Financial Officer Greg Smith said on the call.   

The longer the 737 Max models stay grounded, the more costs build -- and not just for Boeing. Airlines and some suppliers have said they're dealing with added expenses tied to the grounding. Southwest, the biggest operator of 737 planes, recently lowered its 2019 revenue forecast in part because of the Max.

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In all, the delayed 737 Max deliveries could cut $10 billion from Boeing's cash pile in 2019, Bloomberg reported, citing analysts before Boeing's quarterly results were released Wednesday morning. Some experts predict the aircraft won't return to service until October

For now, investors seem to be willing to wait. Boeing stock rose 1.4 percent on Wednesday after the earnings report, seemingly reflecting already diminished expectations.

"The weeks and months ahead will likely still feature some volatility, but we think today's discussion went a long way to quell investor fears around potential tail risks related to the 737," Melius Research analyst Carter Copeland said in a client note after Boeing's latest earnings.

Split the CEO and chairman role?

One possible verdict on Boeing's ability to put its most popular aircraft back in the air could come in the form of breaking up power concentrated at the top. At Boeing's annual meeting scheduled for Monday, shareholders will vote on a frequent question before boards: whether to split the chairman and CEO positions to improve corporate governance. Asked if the outcome of the 737 Max and the ability to restore public trust are key to keeping both roles, Muilenburg noted the company's "strong lead director" and said he believes in keeping the roles combined.

"I have daily communications with the board, both in my chairman role and in my CEO role," Muilenburg said on the earnings call. "We think that is the right, most effective structure for our company. And I think that's, again, showing it to be the case even in the midst of this challenging situation."

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