Boeing is to shut down production of its 737 MAXs amid continued delays in returning the troubled planes to the air.

The decision to freeze production from January follows news last week that the US Federal Aviation Administration would not approve the plane’s return to service before 2020.

The 737 MAX has been grounded since March after two crashes in Indonesia and Ethiopia killed 346 people within five months.

The grounding, and repeated attempts to resolve technical and software issues thought to have led to the crashes, have already cost the plane manufacturer more than $US9 billion ($A13 billion).

Boeing has slowed – but not halted – production of MAXs since the grounding. It has produced up to 42 a month and has about 400 in storage – even though deliveries are frozen until regulators approve the aircraft’s return to the skies.

“We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected,” the company said on Monday (US time).

“As a result of this ongoing evaluation, we have decided to prioritise the delivery of stored aircraft and temporarily suspend production on the 737 program, beginning next month.”

Industry sources said halting production would ease a severe squeeze on cash for the manufacturer,  but only at the risk of causing industrial problems when Boeing tries to return to normal.

Airlines with 737 MAX jets on order also face added uncertainty after already scaling back flying schedules and delaying growth plans due to the grounding.

Southwest Airlines Co, the largest 737 MAX customer, said last week it had reached a confidential compensation agreement with Boeing for a portion of a projected $US830 million hit to operating income in 2019 from the grounding.

Last week, Boeing abandoned its goal of winning FAA approval in December for the 737 to return to commercial flights.

FAA administrator Steve Dickson said he would not clear the plane to fly before 2020 and said the agency had an ongoing investigation into 737 production issues in Washington.

He said nearly a dozen milestones had to be reached before the MAX returned to service. US officials told Reuters approval was not likely until at least February and could be delayed until March.

-with AAP