UPDATE 1-US FAA to conduct scenario-based planning with Boeing before it may lift 737 MAX production cap

The head of the Federal Aviation Administration said on Tuesday the agency intends to conduct scenario-based planning, known as tabletop exercises, with Boeing before it will consider lifting the 38-plane-per-month cap on 737 MAX production. The exercises will review potential issues Boeing may face if it boosts production and aim to ensure the planemaker maintains progress on quality, officials said.

"They still haven't asked us to increase the rate, and we haven't agreed to do anything," FAA Administrator Bryan Bedford told Reuters on the sidelines of an event at the Philadelphia airport on Tuesday. "We agreed that it would make sense to start to develop the process by which we would entertain a rate increase conversation." Bedford added he hopes to complete those exercises, which are still being developed, by the end of September. "Then if they want to ask us for an increase, at least, we'll have a roadmap on how we can evaluate it," Bedford said. The FAA imposed the unprecedented production cap shortly after a January 2024 mid-air emergency involving a new Alaska Airlines 737 MAX 9 missing four key bolts. Since then, the FAA has maintained enhanced in-person oversight of Boeing production.

Boeing did not immediately comment. CEO Kelly Ortberg said in May the planemaker is "pretty confident" that it can increase production of its best-selling 737 MAX jets to 42 a month. Bedford visited Boeing's Renton, Washington, factory on August 15, met with Ortberg, and received briefings on Boeing's safety and quality initiatives and supply chain stability. He also toured the production line. The FAA in May extended by three years a program that allows Boeing to perform some tasks on the agency's behalf, such as inspections, rather than the traditional five years.

Bedford praised Boeing for making a lot of enhancements and changes in the processes they have implemented in terms of quality control but there are still issues with traveled work - which are jobs completed at a later than originally planned stage. "In general, good news, cautiously optimistic, but there's still work to be done," Bedford said.

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