Boeing Stock Tumbles as FAA Halts 737 Max 10 Certification Over Software Glitch

Boeing (NYSE: BA) shares dropped sharply on Monday after the Federal Aviation Administration (FAA) announced it is delaying the certification of the 737 Max 10 aircraft. The regulatory halt follows the discovery of a software glitch that could create distractions for pilots during a critical phase of flight, placing a significant portion of the company's future deliveries at risk.

FAA Cites Potential Flight Risk

The FAA is investigating a flaw in the Flight Management Computer software that can cause the vertical navigation (VNAV) system to disengage during a missed approach, according to a report from CBS News. This reversion to a simpler pitch mode could heighten crew workload at a low altitude when pilots are already managing a complex situation. FAA Administrator Bryan Bedford stated the agency has not yet determined if the issue is a "safety of flight" concern but will withhold certification until it is resolved.

Boeing notified 737 operators of the issue in late August, a company spokesperson told Reuters. While the company has reinforced existing pilot procedures to manage the scenario, a permanent software fix is not expected until 2028, though Boeing is working to accelerate that timeline.

Market Impact and Order Book Exposure

Investors reacted swiftly to the news, sending Boeing's stock down 6.18% to $185.82 in afternoon trading. Trading volume surged to 11.7 million shares, nearly double the three-month average, per Investing.com data, underscoring significant investor concern.

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The certification delay casts a shadow over a crucial part of Boeing's product line. The Max 10, the largest variant in the 737 family, accounts for roughly 31% of the company’s undelivered 737 orders as of the end of June, CBS News reported. This setback adds pressure as the company navigates its financial recovery after posting losses in its last two reported quarters.

Airline Delivery Schedules Disrupted

The FAA's decision has immediate commercial consequences for airline customers awaiting the new aircraft. Key details include:

• Alaska Air Group (NYSE: ALK), which has 105 Max 10s on order, had anticipated its first delivery in spring 2027. Shares of the airline also traded lower on the news.
• Southwest Airlines and United Airlines have informed Boeing they will not accept new Max aircraft equipped with the affected software versions, according to AirwaysMag.

The FAA said it will convene a Corrective Action Review Board to assess the issue, but has not provided a timeline for when the Max 10 certification process might resume.