Boeing's fix for 737 Max may take three to six months, Bank of America predicts

https://www.cnbc.com/2019/03/14/boei...-predicts.html

The software fix that Boeing said it is working on for its 737 Max jets could
take as long as six months, according to Bank of America.

Boeing earlier this week said a software change is in the works as well as
updates to pilot manuals and training and the Federal Aviation Administration
said it would mandate those changes by April.

"Once Boeing identifies the issue on the 737 MAX, the most likely scenario, in
our view, is that the company will take about 3-6 months to come up with a fix
and certify the fix," the bank's analyst, Ronald Epstein, said in a note
Thursday.

The FAA on Wednesday grounded all Boeing 737 Max jets in the U.S., citing links
between two fatal crashes. The turnaround came after dozens of countries
grounded the planes, tanking the stock nearly 11 percent this week, on pace to
post its biggest weekly decline since 2008.

Bank of America kept its buy rating and $480 price target on Boeing as the bank
believes the investigation would have a "definitive timeline" as the recovery of
the black boxes is already underway. This would significantly reduce the
uncertainty around Boeing and the 737 Max model, the bank said. The two black
boxes from the Boeing 737 Max 8 that crashed Sunday in Ethiopia were being taken
to Paris for investigation.

"We would expect Boeing to continue to produce the 737 at the current rate of 52
per month in order to minimize disruption in the supply chain. Boeing may have
to carry inventory in its balance sheet of about $5.5bn per quarter. We would
expect working capital to improve as the aircraft begins delivery again,"
Epstein said.

The bank predicts that the rentals Boeing would have to pay for alternative
airlines would cost the company $500 million or 88 cents per share in the first
quarter.



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