Boeing shares slide after report that FAA is concerned it was misled about 737 Max safety

GP: Boeing 737 Max 1
A Boeing 737 MAX 8 for China Southern Airlines (front) is pictured at the Boeing Renton Factory in Renton, Washington on March 12, 2019. Jason Redmond | AFP | Getty Images

Boeing shares slipped Friday after a Reuters report said instant messages from 2016 suggest that employees misled the Federal Aviation Administration about a key safety system on the 737 Max, the plane that has been grounded since mid-March after two fatal crashes.

The FAA turned over the instant messages to U.S. lawmakers and the Department of Transportation Inspector General, the FAA said in a statement. The FAA says Boeing discovered the messages “some months ago” and the flight regulatory agency finds the document “concerning.”

“The FAA is also disappointed that Boeing did not bring this document to our attention immediately upon its discovery,” the agency said. “The FAA is reviewing this information to determine what action is appropriate.”

The document was shared with lawmakers investigating the plane’s certification, the FAA added.

Boeing shares were down more than 3% in midday trading.

The manufacturer of the planes is scrambling to gain regulators’ approval to bring the planes back to service. Investigators in both crashes — a Lion Air 737 Max that went down in Indonesia in October 2018 and an Ethiopian Airlines plane of the same model that crashed in March — implicated flight-control software in both disasters, which killed 346 people.

Boeing has developed a software fix for the software that misfired on the crashes but regulators haven’t yet signed off. The company is facing several investigations into the plane’s design and software.

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