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The Federal Aviation Administration said Thursday it will extend for three years a program that allows Boeing (NYSE:BA) to perform tasks on the agency’s behalf such as inspections, with the company’s renewed Organization Designation Authorization taking effect on June 1.
Before making the decision to extend the ODA program, the FAA said it had “closely monitored specific criteria and saw improvements in most areas,” but it “will continue to closely monitor Boeing’s performance throughout its renewal period.”
The FAA said it chose to extend the ODA for three years instead of the proposed five-year agreement to ensure the company implements “required improvements.”
The program allows an independent unit within Boeing (NYSE:BA) to perform FAA-delegated tasks such as inspections and approving repairs, but the agency continues to inspect all 737 MAXs and 787 Dreamliners before issuing airworthiness certificates for individual planes, rather than delegating those tasks to the company.
Boeing’s (BA) quality and safety efforts have faced harsh criticism since a January 2024 midair accident involving a door plug that was not secured at the factory; the FAA then imposing a production cap of 38 planes per month on the 737 MAX, which remains in place.
Boeing (BA) shares closed +3.3% on Thursday, reaching the highest since February 2024, after CEO Kelly Ortberg said China would resume taking deliveries of the company’s aircraft in June and that he hoped to raise monthly production of 737 MAX jets to 47 by the end of this year.