RENTON, Wash. -- Boeing Co. said Tuesday that it has started factory assembly of its first 737 Max jetliner, a key milestone in the upgrade of its best-selling single-aisle jetliner range.

Keith Leverkuhn, vice president and general manager of the 737 Max program, said wing assembly of the first test aircraft began in late May.

The jet is scheduled to make its first test flight early next year and enter service with Southwest Airlines Co. in the third quarter of 2017.

Write to Jon Ostrower at jon.ostrower@wsj.com

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