Boeing's long-awaited 777X program has achieved a significant regulatory milestone, passing a major FAA-supervised testing phase. The development shifts investor attention back to certification progress, though the central question remains the company's ability to convert its massive order book into cash.
Shares edged up 0.3% to $216.01 in late morning trading on Monday, reflecting cautious optimism. The stock's market capitalization now stands near $170 billion, with investors closely watching for signs of production and delivery improvements.
Test Phase Details
Stephanie Pope, head of Boeing Commercial Airplanes, confirmed that the FAA has signed off on Type Inspection Authorization Phase 4B tests for the 777-9. This critical step allows FAA personnel to participate in flight and ground tests necessary for certification. Pope described the approval as “one of the biggest pieces remaining” in the 777-9 flight-test campaign. The next phase will focus on avionics, stability, control, and human factors—areas that regulators have scrutinized closely following past engineering and production issues.
Financial Picture
Boeing reported first-quarter revenue of $22.2 billion, with free cash flow at negative $1.5 billion. The company's backlog stands at $695 billion, encompassing more than 6,100 commercial aircraft. While demand remains robust, turning orders into deliveries and cash has proven challenging amid ongoing production and regulatory hurdles.
Analyst views on Boeing remain mixed. Simply Wall St highlighted “recent share price weakness” and “mixed valuation signals,” while Zacks noted the stock has outperformed its industry over six months, citing aircraft orders, defense backlog, and services demand. Motley Fool’s James Brumley characterized the investment case as a “definitive maybe,” weighing backlog strength against valuation risk.
Production and Delivery Outlook
CEO Kelly Ortberg told CNBC that Boeing is studying the possibility of eventually increasing 737 MAX production to 70 aircraft per month, though he emphasized it remains “a study activity right now.” The company currently targets 63 MAX deliveries per month, while rival Airbus aims for 70 to 75 A320neo-family deliveries per month by late 2027.
WestJet CEO Alexis von Hoensbroech said Monday that the airline expects to begin flying its first Boeing 737 MAX 10 in the first quarter of 2027, contingent on approvals from U.S. and Canadian regulators. He noted that Boeing and the FAA have expressed “a lot of confidence” about the certification process.
Southwest Airlines remains committed to the MAX family despite ongoing delays. Chief Operating Officer Andrew Watterson told Reuters that introducing a second fleet type, such as Airbus’s A220, could increase risk for the carrier.
Services and International Demand
Boeing Global Services head Chris Raymond said the company can supply aftermarket parts for a 200-jet order from China, provided those parts can be sold worldwide. Boeing already operates a parts warehouse in China, supporting its services business as a key driver of commercial recovery.
On June 5, Boeing and Riyadh Air announced the delivery of the Saudi airline’s first two 787 Dreamliners, part of a larger order for up to 72 jets. Riyadh Air aims to serve over 100 destinations by 2030, underscoring that demand for Boeing aircraft remains strong.
Risks Remain
Despite the 777X progress, risks persist. Certification could face further delays, suppliers may struggle to keep pace with higher 737 production rates, and any new quality issue would be damaging for a company still rebuilding trust. The first-quarter cash burn underscores the urgency of translating production gains into deliveries, rather than adding to inventory.
For investors, the story is more nuanced than headlines suggest. Boeing is not short of airline demand. What it needs is concrete evidence that it can manufacture, certify, and deliver aircraft efficiently so that its cash performance begins to align with its share price.
