Yesterday, portfolio holding Boeing (BA) received news from the Federal Aviation Association (FAA) that the FAA will retain the authority to issue airtworthiness certificates for all Boeing's 787 Dreamliner aircrafts. As a reminder on Boeing's 787 situation, the FAA had halted the delivery of this aircraft due to certification issues. Point of clarity, this means only newly produced B787 aircrafts are being held up; there's nothing wrong with currently-flying B787 or other aircrafts, including the infamous B737 Max. This directive means that the FAA will now be responsible for certifying all 787 Dreamliners, taking away Boeing's ability to self-certify.

While the headline appears to be negative at first pass, we never anticipated anything different from the FAA. We were actually surprised that before, Boeing had the ability to self-certify their own aircrafts. The Boeing-FAA relationship used to be a "romantic" one, with most Boeing's employees end up working for the FAA or the FAA would outsource a lot of work to Boeing. This made sense given Boeing is the biggest and only commercial airplane manufacturer in USA: it's like if you need to form a government agency on regulating cell phones, you'd want to have people from Apple on it because they're the biggest cell phone manufacturer. However, this relationship came under scrutiny with the B737 Max saga: the public demands a separation between the FAA - a federal agency in charge of regulation - and Boeing - a non-government company. 

The market actually took this news in stride, as the stock briefly lost about $3, and then came right back to levels before the news came out. We don't think the market was surprised by this news. Actually, we think this is progress made by Boeing to finally push forward this process. 787 is a key product for Boeing when international travel opens up (which we believe this year will be an inflection point).

So we're not doing anything to our position in light of this news. Let's review the technical status of Boeing stock: