CORRECTED-UPDATE 2-FAA tells U.S. airlines it could approve MAX return to service before mid-year -sources

(Corrects headline to show FAA told airlines MAX could get approved to return to service before mid-year, not could return to service before mid-year)

WASHINGTON, Jan 24 (Reuters) - Federal Aviation Administrator Steve Dickson has called senior U.S. airline officials Friday and told them that the agency could approve the grounded Boeing 737 MAX’s return to service before mid-year, people briefed on the calls said Friday.

Dickson’s calls come days after Boeing said it was pushing back its timeline for approval of the plane’s return and “currently estimating that the ungrounding of the 737 MAX will begin during mid-2020.”

A person briefed on one of Dickson’s calls with the airlines said he told officials the Boeing mid-year timeline is “very conservative.”

Boeing’s best-selling plane has been grounded since March after two fatal crashes killed 346 people.

Boeing’s stock erased losses on the news and was up 2%.

The agency confirmed in a statement Friday that Dickson is making calls “to reiterate that the FAA has set no time frame for completion of certification work on the aircraft.” The agency added it is “pleased with Boeing’s progress in recent weeks toward achieving key milestones.”

The FAA added that “safety is the top priority, and the FAA continues to work with other safety regulators to ensure that Boeing has addressed all known issues with the aircraft.”

FAA approval before mid-year could only happen if Boeing continues to make complete and thorough submissions, the official said, and emphasized that unforeseen issues could always potentially delay approval.

American Airlines Group Inc, United Airlines Holdings Inc and Southwest Airlines Co have all pushed back the resumption of MAX flights until early June. This week, United told investors it does not expect to fly the Boeing 737 MAX this summer.

After Boeing revised its timeline this week, no U.S. carrier took any immediate action to extend flight cancellations. Airlines have said they will need at least 30 days after the FAA grants approval for pilot training, software updates and required maintenance.

Boeing Chief Executive Dave Calhoun told reporters this week the company could resume production in April. Calhoun said the mid-year timetable came after the planemaker endorsed a plan for pilots to do simulator training before they resume flying the MAX.

Reporting by David Shepardson, Editing by Franklin Paul and Cynthia Osterman