Airlines stick with Boeing despite Dreamliner drama
A series of problems have beset the much-hyped aircraft. And federal regulators have taken notice.
The radical design of Boeing's (BA) 787 Dreamliner is light years ahead of its competitors, enabling it use less fuel than more conventional aircraft.
Airlines seem to be willing to cut the aerospace giant some slack as it works through some embarrassing technical glitches. Their patience, however, will be put to the test as the Federal Aviation Administration conducts a comprehensive review of the Dreamliner to address the problems.
Boeing has delivered 50 Dreamliners, and it seems likely that some orders are on hold pending the results of the FAA's review.
The FAA will look at the design, manufacture and assembly of the much-hyped aircraft in conjunction with the company. Perhaps Boeing should change the 787's name to "Murphy's Law" because everything that could go wrong with the state-of-the-art aircraft has gone wrong. The National Transportation Safety Board is conducting a separate probe of a Jan. 7 fire in Boston in a battery pack that occurred after passengers disembarked.
Boeing, which delayed releasing the Dreamliner for nearly four years because of numerous technical glitches, is standing behind its product which promises to fly people farther, faster and at a lower cost than more conventional aircraft. Indeed, it is telling that the FAA didn't order the grounding of all Dreamliners, which had its first flight in 2011. Such an action, though, could still happen if serious problems are uncovered by the FAA. Transportation Secretary Ray Lahood said the officials want to make sure that the problem with Dreamliner don't happen again.
There is plenty to talk about in the wake of reports of fuel leaks and electrical problems. Earlier Friday, a 787 Dreamliner operated by All-Nippon Airways landed safely in Tokyo after a crack was found in the cockpit window. Another All-Nippon crew reported an oil leak in another Dreamliner.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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[BRIEFING.COM] S&P futures vs fair value: -4.30. Nasdaq futures vs fair value: -8.50. Equity futures moved up in reaction to the latest durable orders data. However, the S&P 500 futures continue to trade lower by 0.3%.
April durable goods orders increased by 3.3%, which was better than the 1.6% increase that had been expected among economists polled by Briefing.com. This comes after the prior month's reading was revised up to reflect a decrease of 5.9%.
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Investors expect the report to show some weakness, and are cautious ahead of the long holiday weekend.