US air watchdog said last week it would not approve plane’s return to service before 2020

Boeing is temporarily halting production of its grounded 737 Max after the Federal Aviation Administration (FAA) said last week it would not approve the plane’s return to service before 2020.

The decision came after the US planemaker’s board held a regular two-day meeting in Chicago, which started on Sunday.

“Safely returning the 737 Max to service is our top priority,” Boeing said in a statement. “We know that the process of approving the 737 Max’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 Max updates.”

The Max, which was Boeing’s bestselling plane, has been involved in two fatal crashes that claimed 346 lives. More than 700 Max jets are now grounded worldwide. It is the first time in 20 years that Boeing has halted 737 production and the move could have significant repercussions for the US economy.

Boeing is the US’s largest manufacturing exporter and a shutdown would impact suppliers across the country, hitting the country’s already troubled manufacturing sector. The suspension has already led to the cancellation of thousands of flights scheduled by airlines that were awaiting new planes or had bought ones that are now grounded.

The Seattle Times reported on Sunday that the board was considering a proposal from top management to temporarily shut down 737 production in Renton, Washington from January.

Boeing as yet has no timeframe for restarting production but plans to redeploy its 12,000-strong Renton workforce.

Boeing has said if it did not receive approval to begin deliveries before the end of the year it could be forced to further slow production or temporarily shut down the Max production line, a move that would have repercussions across its global supply chain.

On Thursday, Boeing abandoned its goal of winning approval this month to unground the 737 Max after its chief executive, Dennis Muilenburg, met FAA administrator Steve Dickson. Dickson said on Wednesday he would not clear the plane to fly before 2020 and disclosed the agency had an ongoing investigation into 737 production issues in Renton, Washington.

Dickson said there were nearly a dozen milestones that must be completed before the Max returns to service. Approval is not likely until at least February and could be delayed until March, US officials told Reuters last week.

Dickson told Muilenburg, according to an email sent to lawmakers by the FAA, that “Boeing’s focus should be on the quality and timeliness of data submittals for FAA review. He made clear that FAA’s certification requirements must be 100% complete before return to service.”

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Boeing had said last month it expected the FAA would allow it to resume 737 Max deliveries in December.

The FAA told congressional staff in an email last week Dickson was “concerned that Boeing continues to pursue a return-to-service schedule that is not realistic ... More concerning, the administrator wants to directly address the perception that some of Boeing’s public statements have been designed to force FAA into taking quicker action.”