Boeing hopes to fly above 787 safety storm
A series of incidents and now an FAA grounding could hurt the company just as it planned to ramp up production of the long-delayed Dreamliner.
This incident comes barely a week after a battery on board a Japan Airlines' (JAL) Dreamliner caught fire at Boston's Logan Airport, and another JAL Dreamliner was found to have a fuel leak.
These events prompted the FAA to order a review of the critical systems of the 787, including its design, manufacture and assembly, which has resulted in the temporary grounding of the planes.
Precautionary measures by 787 operators
Boeing has delivered around 50 787 Dreamliners to eight airlines -- All Nippon Airways, Japan Airlines, Air India, Ethiopian Airlines, Chile's LAN Airlines, LOT Polish Airlines, United and Qatar Airways. In response to recent malfunctions, which have included battery trouble, cracked windshield and fuel leakage, several 787 operators have taken precautionary steps. Japan Airlines suspended operations of all seven Dreamliners in its fleet. India's aviation regulator --Director General of Civil Aviation (DGCA) -- said that it will check the six Dreamliners in Air India's fleet.
Boeing has said that it is working with all the operators of 787s to resolve issues and that it has full confidence in the air-worthiness of the 787 Dreamliner. In a statement on Jan. 11, the company said that it will fully cooperate with the FAA to review the recent issues and critical systems of the Dreamliner.
It is not uncommon for new airplane models to witness issues in their first year or two of service. Boeing's 777 and Airbus' A38 also had problems during their initial days. Boeing echoed this by saying, "Like the 777, at 15 months of service, we are seeing the 787's fleet wide dispatch reliability well above 90%."
However, when followed by an FAA review, such incidents erode customers' (airlines) confidence in Boeing and threaten to pull down 787 delivery rates in the near-term. Further, reduced delivery rates could potentially bring Boeing down from its top position in annual airplane deliveries. A position it was able to occupy after a decade by replacing Airbus.
Trefis currently has a stock price estimate of $75.16 for Boeing, marginally below its current price.
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