FAA Halts Boeing 737 MAX 10 Certification Over New Software Flaw, Shares Fall 6.9%

Boeing shares fell 6.9% on Monday, closing at $184.39, after the Federal Aviation Administration said it would not certify the 737 MAX 10, the largest and last-to-be-approved member of Boeing's best-selling jet family, until the company fixes a newly discovered software problem in the plane's flight-control system.

The setback lands at an unusually bad moment for Boeing, which had told investors just five weeks earlier that flight-test work on the MAX 10 was essentially finished and that certification remained "on plan" for this year. Instead, the company now faces an open-ended delay of uncertain length on an airplane whose approval Wall Street had treated as all but a formality.

The numbers

Monday's 6.9% drop wiped out roughly $11 billion of Boeing's market value in a single session. Shares partly recovered on Tuesday, rising 1.78% to close at $187.68, leaving the company's market capitalization at about $148 billion, according to trading data on the stock. The stock remains well below its 52-week high of $254.35 and closer to its 52-week low of $176.77.

The delay comes on top of an already difficult financial picture. Boeing reported a GAAP loss of $0.67 a share in its most recent quarter on revenue of $24.6 billion, up 8% from a year earlier, along with operating cash flow of just $1.4 billion and free cash flow of $0.6 billion, according to the company's own earnings release — modest figures for a company of Boeing's size that show how much its recovery still depends on cash from new jet deliveries the MAX 10 was supposed to help provide. Wall Street has largely stayed supportive despite the losses: analysts hold a consensus "moderate buy" rating on the stock with an average price target above $270, including a $300 target from Susquehanna and a recently trimmed $290 target from UBS, both implying substantial upside from current levels even after Monday's drop.

How Boeing got here

The MAX 10 is the fourth and largest variant of the 737 MAX family, seating roughly 230 passengers, and it is central to Boeing's plan to compete with Airbus's A321neo for the largest slice of the single-aisle jet market. Its path to certification has already run years behind Boeing's original schedule, complicated first by an unresolved engine anti-ice issue and then by the stricter scrutiny regulators have applied to Boeing since the two 737 MAX crashes in 2018 and 2019. The MAX 10's smaller sibling, the MAX 7, only received its own amended type certificate on August 3, after what the FAA described as "almost a decade of extensive review" that required Boeing to update its flight-control software, flightcrew alerting system and engine anti-ice design before approval. In its own announcement of that certification, Boeing Commercial Airplanes president Stephanie Pope called it validation of "the rigor of our airplane's design," and the company said at the time it was "working to certify the 737-10 this year."

The new problem is, by regulators' own description, a smaller one than the defects that grounded the MAX fleet worldwide after the 2018 Lion Air and 2019 Ethiopian Airlines crashes, but it goes to the same basic category of risk: a piece of cockpit software behaving unpredictably during a safety-critical maneuver. According to reporting on the FAA's findings, a cockpit software update meant to fix an earlier bug instead introduced a new flaw that can cause an automated navigation feature to fail when pilots alter their preprogrammed flight plan after a missed approach, or "go-around" — the maneuver in which a crew aborts a landing attempt and climbs away to try again. The FAA said it is still evaluating whether the flaw amounts to a genuine safety issue or primarily an added workload for pilots, who are trained to fly the maneuver manually regardless of what the automation does.

A fix for an earlier version of the same bug is what introduced the new one now under FAA review, aviation trade publications reported. That sequence — one fix creating a fresh, smaller defect — is a familiar pattern from Boeing's post-2019 certification history, in which successive rounds of software and hardware changes required by regulators have repeatedly uncovered new issues even as they resolved old ones.

Who is affected

The most immediate consequences fall on the airlines that have been waiting years for their MAX 10 orders, several of which had grown cautiously optimistic that certification was finally imminent. United Airlines and Southwest Airlines have told Boeing they do not want new aircraft delivered with the software version implicated in the glitch, according to reporting on the FAA's announcement, while Alaska Airlines said it remains in close contact with both Boeing and the FAA as the issue is resolved. Airlines that had been counting on MAX 10 deliveries to replace older, less efficient aircraft or add capacity now face yet another rescheduling of fleet plans that, in some cases, have already been revised repeatedly since the aircraft's original target certification date years ago.

Boeing itself is affected on multiple fronts at once. The company has been ramping up 737 production, reaching a rate of 47 aircraft a month last quarter and activating low-rate initial production on a new assembly line, moves that assumed the MAX 10 would soon be added to the mix of variants rolling off Boeing's Renton, Washington plant. Every additional week of delay adds to the inventory of undelivered aircraft Boeing must finance and store, and extends the timeline before the company can begin collecting the final payments that come only once a jet is handed over to a customer.

What people are saying

FAA Administrator Bryan Bedford was direct in framing the delay as a matter of caution rather than a return to the scale of Boeing's earlier crisis.

"We will be delaying the [MAX] 10 until ... we're satisfied we don't have an issue here."

Bedford described the newly found flaw as "a new bug, smaller" than the defect that led to the 2019 grounding, and said pilots remain trained to safely complete a landing without relying on the automated navigation feature in question. Boeing, for its part, struck a cooperative tone, saying only that it "continue[s] to follow the lead of the FAA as we work through the certification process" and that its engineers are already developing "a software update to permanently address the issue." Kelly Ortberg, Boeing's chief executive, had told investors on the company's most recent earnings call that "our operations are more stable and key certification programs remain on plan" — a claim this week's delay directly complicates, even if it does not necessarily invalidate the broader turnaround Ortberg has been overseeing since taking over the company.

What happens next

Bedford has said a fix could arrive in days, weeks or months, an unusually wide range that leaves airlines, suppliers and investors with little basis for planning around a firm date. Boeing has said it expects to deliver a permanent software patch, after which the FAA will need to review and approve the change before certification can proceed. The company's own guidance, as of its July earnings call, called for certification of both the MAX 7 and MAX 10 within 2026 and first MAX 10 deliveries in 2027; that timeline is now explicitly at risk, though neither Boeing nor the FAA has said the year-end certification target is dead.

Investors will be watching Boeing's next quarterly update for any change to that guidance, as well as for signs of how United, Southwest and other MAX 10 customers adjust their own delivery expectations in the meantime. For a company that has spent years trying to convince regulators, airlines and the flying public that its production and engineering discipline has genuinely improved, a second software surprise on the same airplane — however much smaller than the defects of 2019 — is the kind of setback Boeing can least afford to have become routine.