Boeing's Dreamliner could be cleared for takeoff
The debacle over its fire-prone batteries has cost the aerospace giant $600 million to fix, but not any big order cancellations.
According to The Wall Street Journal, the Federal Aviation Administration "is expected to move as soon as Friday" to end the three-month grounding of the fuel-efficient aircraft after a series of embarrassing lithium-ion battery fires. Chicago-based Boeing has redesigned the batteries and has convinced the FAA that they are safe.
Shares of Boeing rose nearly 1.5% to around $87.40 in Friday trading. They have gained more than 15% this year.
Boeing probably spent about $600 million to address fix the mechanical glitches on its 787 that caused the FAA to take the unusual step of ordering the grounding of the entire fleet, something it hadn't been done since 1979. This is the latest episode in the long, strange history of this ultramodern aircraft.
The Dreamliner was delayed for nearly four years because of numerous technical glitches before its first delivery in 2011. Airlines are drawn to the plane because it promises to fly more people cheaper and further with less fuel. The aircraft is 20% more efficient than similar-size planes. For airlines, whose profits largely depend on the price of jet fuel, this is a huge selling point.
United Airlines (UAL), for one, has said the Dreamliner makes it economically feasible to run service between Denver and Tokyo, according to the Denver Post. The aerospace giant has delivered 50 of the aircraft so far. Although Boeing has warned of delays in Dreamliner deliveries, there doesn't appear to have been any large-scale cancellations.
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: +3.30. Nasdaq futures vs fair value: +8.30. U.S equity futures show a slightly positive bias coming off last week's striking turnaround rally. Trading activity was fairly subdued in Asia and major European bourses remain closed following the Easter holiday.
Reviewing overnight developments:
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