Boeing shares plunge as 737 MAX may not get approved to return until mid-year: source

WASHINGTON (Reuters) – Boeing Co (BA.N) shares plunged on Tuesday after the planemaker told airlines and suppliers it now forecasts it does not expect to win approval from regulators for the return of the 737 MAX to service until June or July – significantly longer than some forecasts – a source briefed on the matter said.

The new estimate, which was reported earlier on Tuesday by CNBC, is based on a number of factors, including new anticipated pilot training requirements. 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.

Boeing shares fell 5.5% and were halted for pending news. Boeing is expected to disclose details of the estimate later on Tuesday.

The Federal Aviation Administration and Boeing 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.