Boeing Shares Rise After FAA Deems 737 MAX Software Glitch Not a Safety Risk

Boeing (NYSE:BA) shares gained on Friday after the U.S. Federal Aviation Administration determined that a recently identified software glitch on the 737 MAX does not constitute a flight-safety issue, according to a report from The Wall Street Journal.

FAA Finds No Unsafe Condition

U.S. air-safety regulators convened an internal panel, known as a corrective action review board, on Friday to evaluate the software problem. The board concluded that the issue did not represent an unsafe condition requiring immediate action, the report said, citing officials familiar with the matter.

In a statement, the FAA explained its decision. "The FAA's Corrective Action Review Board made that determination because pilots retain full control of the aircraft, the indications to the flight crew are clear and unambiguous," the agency said.

The regulator noted that it would continue to monitor the situation, adding, "As with any situation, the FAA will consider appropriate action if it receives new information about this issue."

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Market Impact

Following the news, shares of Boeing traded 1.5% higher, reflecting investor relief that the issue would not lead to grounding or costly, immediate retrofits.

The software problem had initially raised concerns among some aviation industry officials about potential safety implications for 737 MAX aircraft during landings under specific circumstances, according to The Wall Street Journal. The FAA's swift assessment and conclusion helped to alleviate those immediate market fears.