Boeing Shares Fall As Dreamliner Deliveries Halted Again

Boeing Shares Fall As Dreamliner Deliveries Halted Again

Another day, another “surprise” for Boeing shareholders: the aerospace giant has again halted deliveries of the wide-body 787 Dreamliner due to new FAA requests about the company’s strategy to address previously disclosed production issues that emerged in early September 2020, according to WSJ

“We continue to work closely with the FAA in a transparent and timely manner,” Boeing said. “There is no impact on the in-service fleet.”

FAA regulators are said to demand more information about how the Chicago-based plane manufacturer would address quality control issues of components within the 787 Dreamliner fuselage which previously led to a five-month halt in deliveries. It was not immediately clear how long the pause in deliveries might last. 

Shares of Boeing dropped more than 1% following the news. 

According to an Aug. 31 FAA memo, quality-control lapses at Boeing 787 Dreamliner production lines located in South Carolina found certain parts failed to meet even Boeing’s own “design and manufacturing standards.” 

787MAX: The FAA is reviewing persistent Boeing quality-control lapses at a 787 Dreamliner factory: WSJ

— zerohedge (@zerohedge) September 7, 2020

Many of the 787 quality lapses are small gaps where the plane’s fuselage and body are joined together. Other problems have developed, including the vertical fin and horizontal stabilizer at the tail. Such gaps open up a can of worms for Boeing because the aircraft are prone to premature airframe fatigue, eventually requiring extensive repairs. 

Boeing has yet to satisfy the FAA. The agency has required it to perform widespread inspections of Dreamliners. This process is timely, labor-intensive, and expensive.  Aviation data firm Ascend by Cirium shows Boeing delivered a total of 12 Dreamliners in the two months since deliveries resumed on Mar. 26, after a five-month halt to address production problems. 

Last month, CEO David Calhoun said Dreamliner deliveries are expected to fall short of expectations as the manufacturer planned to deliver 10 to 12 planes each month. The temporary halt in deliveries seems to throw a monkey wrench in Calhoun’s 2021 projections. 

Dreamliner woes could also pressure Boeing’s finances even more. The company has sustained tremendous financial damage following two fatal accidents of its narrow-body 737 MAX.

Reuters quoted Boeing as saying it’s working to provide the FAA with additional verification for undelivered Dreamliners. The company said there is no impact on the in-service fleet of the planes. 

Tyler Durden
Fri, 05/28/2021 – 07:17

Share DeepPol