FAA halts Boeing 737 Max production expansion, but clears path to return Max 9 to service

The Federal Aviation Administration on Wednesday halted Boeing's planned expansion of its 737 Max aircraft production, but it cleared a path for the manufacturer's Max 9 to return to service nearly three weeks after a door plug blew out during an Alaska Airlines flight.

"Let me be clear: This won't be back to business as usual for Boeing," said FAA Administrator Mike Whitaker in a statement Wednesday. "We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues uncovered during this process are resolved."

Boeing didn't immediately comment. Its shares were down roughly 4% in after-hours trading after the FAA's announcement.

Boeing has been scrambling to ramp up output of its best-selling aircraft as airlines clamor for new jets in the wake of the Covid-19 pandemic.

The FAA on Wednesday also said it approved inspection instructions for the Max 9 aircraft. Airlines had been awaiting that approval to review their fleets to return those planes to service.

The FAA grounded the 737 Max 9 planes after a fuselage panel blew out as Flight 1282 climbed out of Portland, Oregon, on Jan. 5. The grounding forced United Airlines and Alaska Airlines, the two U.S. airlines with the planes, to cancel hundreds of flights.

The CEOs of United and Alaska have expressed frustration with Boeing after the issue, the most serious in a recent spate of apparent manufacturing flaws on Boeing aircraft. The aircraft on the Alaska flight was delivered late last year.

The FAA is investigating Boeing's production lines after the Alaska flight. Whitaker told CNBC on Tuesday that the FAA will keep "boots on the ground" at Boeing's factory