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Boeing to delay some 787 deliveries after finding new glitch

Tan KW
Publish date: Wed, 07 Jun 2023, 12:59 PM
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 Boeing Co will delay deliveries of its 787 Dreamliner after uncovering a defective part in recent days, a setback as the plane-maker works to meet soaring demand for its long-range aircraft.

The flaw may affect about 90 already-built Dreamliners that haven’t yet been delivered, Boeing said, as well as a handful of planes on its final assembly line in North Charleston, South Carolina. Each aircraft will be inspected for improperly sized shims within the horizontal stabiliser, a tiny wing attached to a jet’s tail.

The issue rattled investors who’ve endured a series of production mishaps at the US plane-maker. Boeing had to shut down Dreamliner shipments for the better part of two years, and it’s still working through a supplier defect affecting hundreds of its 737 Max jets. Just last week, chief executive officer Dave Calhoun said that, with suppliers, the bumps in the road “are getting lower, smaller”.

Boeing shares erased gains after the disclosure, ending Tuesday (June 6) down 0.7% in New York.

“We’re not out of the woods on suppliers yet,” said George Ferguson, an analyst with Bloomberg Intelligence, in an interview. He expects Boeing and rival Airbus SE to continue to face parts shortages and quality lapses at least through the end of 2024, noting that aerospace suppliers have been particularly hard hit by a shortage of skilled labour and supply snags from the pandemic.

The new 787 inspections and repairs will also likely slow Boeing’s effort to clear the undelivered airplanes from its inventory, Ferguson said. And the delivery delays may exacerbate a shortage of new aircraft during the busy summer travel season as airlines work to keep up with a post-pandemic jump in air travel. 

Still, the latest issue doesn’t appear to be the kind of showstopper that would damage Boeing’s financial health, Ferguson said.

Hurdles ahead

Boeing said it doesn’t intend to halt Dreamliner production, and it still expects to deliver between 70 and 80 of its marquee wide-body aircraft this year. Plans to raise production rates to five jets a month by year end haven’t changed, either.

Ironing out production glitches is crucial for Boeing’s cash flow and Calhoun’s mission to work down a US$55 billion debt load that piled up during the pandemic and the global grounding of its 737 Max after two fatal crashes. The US plane-maker and Airbus have also been struggling to ramp up work in their factories to keep pace with soaring demand for new jets.

The next 787 horizontal stabilisers to be shipped from Boeing’s Salt Lake City factory will be built with shims that meet Boeing’s engineering specifications, the company said. The faulty component is a bracket that’s provided by a supplier and installed at the Utah facility, Boeing said without identifying the subcontractor.

The company is also working with US regulators to determine if they need to take any action for 787 jets currently in service. The flawed parts aren’t considered an immediate safety or flight issue by the Federal Aviation Administration (FAA) and won’t require emergency repairs for Dreamliners already in commercial service, Boeing said.

“The FAA is in close communication with Boeing and will ensure that Boeing takes the appropriate steps to address the situation,” the US regulator said. “The agency will issue no new airworthiness certificates for the 787 until the matter is addressed to its satisfaction.”

Boeing paused 787 deliveries earlier this year, and is only just recovering from tiny structural defects that halted Dreamliner shipments during 2021 and 2022. The plane-maker is looking to increase output of the Dreamliner to a 10-jet monthly pace by mid-decade, a goal that’s crucial to meeting Calhoun’s target of generating US$10 billion in cash by 2025 or 2026.

 


  - Bloomberg

 

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