WSJ: Boeing identified 737 MAX software glitch that could cause automated navigation failure on landing; Boeing confirmed, FAA to convene Corrective Action Review Board, Southwest/United refused new deliveries with the flawed software; BA -6% Monday, leading Dow decliners
What happened
The Wall Street Journal reported Saturday, Sept. 26 that Boeing had identified a previously undisclosed 737 MAX software glitch that could cause an automated navigation feature to fail during landing. Boeing confirmed it: "Last month, we informed all 737 operators about a software issue where pilots may not have access to automated flight guidance during a specific landing scenario," adding engineers are working on a permanent software update. On Monday, Sept. 28, the FAA said it was aware of a potential issue in the flight-computer software update and "will convene a Corrective Action Review Board (CARB) and will take immediate action if it identifies a safety concern"; FAA Administrator Bryan Bedford separately said the agency "will be delaying the [MAX] 10 until we're satisfied that we don't have an issue here." Boeing shares fell 6.9% Monday to ~$184.29–$184.39 (a 10-month low, biggest fall since last October), leading Dow decliners.
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Start your free 14-day trialWho’s affected
- BA (Boeing) — fell 6.9% Monday to ~$184.29–$184.39, a 10-month low and its biggest fall since last October; led Dow decliners; down ~14–15% year-to-date. GE Aerospace (GE) — fell 2.7% to $318.24 Monday
- Barron's/Jefferies report GE developed the software, and GE said "Safety is our top priority... We are working closely with Boeing and will support the FAA's evaluation." Southwest (LUV) and United (UAL) — key MAX customers refusing deliveries with the flawed software. Boeing's entire MAX-10 backlog (1,500+ orders, core to projected 800+ deliveries in 2028 and ~$10B free cash flow) is exposed to certification delays.