FAA Extends Program Allowing Boeing To Conduct Inspections On Agency's Behalf

The Federal Aviation Administration, or the FAA, has extended a program allowing U.S. aircraft manufacturer Boeing Co. (NYSE:BA) to conduct safety and quality inspections and approve repairs on its aircraft on the FAA's behalf.

What Happened: According to a Reuters report on Friday, the FAA extended Boeing’s authorization under the Organization Designation Authorization (ODA) program for another three years.

The agency provided the extension after observing that the company had made improvements, the report suggests. FAA says that the agency "closely monitored specific criteria and saw improvements in most areas."

The agency will continue "to closely monitor Boeing's performance throughout its renewal period,” it said in a statement cited in the report. Boeing, on the other hand, said it will continue to improve under FAA guidelines.

Why It Matters: The company has been under criticism for its safety and quality practices after a Boeing 737-800 aircraft operated by South Korea's JejuAir crashed, tragically taking the lives of 179 of the 181 passengers on board the aircraft. 

In a separate incident, an Alaska Airlines Boeing 737 Max 9 aircraft experienced uncontrolled decompression as a door plug blew out. The incident led to 65 Boeing 737 Max 9 aircraft being grounded temporarily.

Boeing was also under FAA scrutiny for faulty bathroom latches in its aircraft. The agency proposed an airworthiness report. The repairs could cost Boeing over $3.4 million.

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Price action: BA gained 3.32% at market close and is currently trading at $208.18, according to Benzinga Pro data.

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