Boeing Stock Falls on New 787 Dreamliner Problem

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Barron's 13 July, 2021 - 08:25am 29 views

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Boeing stock slipped in premarket trading on Tuesday, as the plane maker cut its delivery target for 787 Dreamliner planes after discovering a production defect.

The aerospace giant halted deliveries of 787 Dreamliners in May after the Federal Aviation Administration said it needed more information on the company’s planned method for inspecting the jets.

Boeing said on Tuesday that it has subsequently found “additional rework” that will be required on undelivered 787 jets. The company now expects to deliver less than half of the 787s currently in its inventory this year. Boeing’s 787 production rate will also be reduced to below five a month, while work on the problem is prioritized.

The stock was 2.1% lower in premarket trading, weighing on Dow Jones Industrial Average futures, which were 0.2% down, implying an 80-point loss at the open. Boeing stock is 11% up year to date, as of Monday’s close, but has fallen 11.5% from a recent peak in March.

Boeing expects the defect to take at least three weeks to address, The Wall Street Journal reported, citing people familiar with the matter. The FAA said the issue posed no immediate safety threat, the report added.

Dreamliner deliveries were initially halted in the fall for five months as the FAA investigated manufacturing flaws, before restarting in March 2021.

The newly identified problem is another blow for Boeing after the FAA recently told the plane maker its 777X jet likely won’t be approved for commercial service until mid-2023.

In more positive news for Boeing, the company resumed deliveries of the 737 MAX in May after securing regulatory approval for a fix to an electrical problem. The 737 MAX returned to service in November 2020 after being grounded for 20 months following two fatal crashes.

Write to Callum Keown at callum.keown@dowjones.com

Boeing stock slipped in premarket trading on Tuesday, as the plane maker cut its delivery target for 787 Dreamliner planes after discovering a production defect.

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Boeing discloses a new problem with the 787 Dreamliner

CNN 13 July, 2021 - 11:34am

Updated 10:50 AM ET, Tue July 13, 2021

Jim Cramer: I'm 'sick' about what's happening at Boeing

CNBC Television 13 July, 2021 - 11:34am

Boeing finds new 787 Dreamliner flaw, stalls production

CNBC Television 13 July, 2021 - 11:34am

New production problem found with Boeing's 787; SC site to slow down production

Charleston Post Courier 13 July, 2021 - 07:00am

Mixed clouds and sun with scattered thunderstorms. High 87F. Winds SSE at 10 to 15 mph. Chance of rain 40%..

Partly cloudy skies. Low around 75F. Winds S at 5 to 10 mph.

Production of 787 jets in North Charleston will temporarily slow down after new flaws were found in part of the nose of the aircraft. File/Grace Beahm Alford/ Staff

With the new issue requiring more rework and additional time, Boeing has decided to slow down production in North Charleston.

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Production of 787 jets in North Charleston will temporarily slow down after new flaws were found in part of the nose of the aircraft. File/Grace Beahm Alford/ Staff

This newly identified issue was found in part of the nose of the plane. Small gaps were identified between two sections of a part of the aircraft called the forward pressure bulkhead, which helps maintain cabin pressure while the jet is in flight.

Boeing said the issue doesn't present an immediate safety concern, but it will be fixing the problem on all affected undelivered 787s. 

The widebody jet program, which is now based solely in South Carolina, was already in the midst of a second lengthy pause on 787 deliveries after regulators at the Federal Aviation Administration declined to accept Boeing's request to start using a different inspection method for the jets. 

Now, with the new issue requiring more rework and additional time, Boeing has decided to slow down production in North Charleston. 

The planemaker will be "reprioritizing production resources for a few weeks to support the inspection and rework," according to a statement. That means the production rate for the 787 will temporarily be lower than the already reduced rate of five per month. 

Boeing says it will "gradually return to that rate."

Federal regulators are aware of the issue, according to statement from the FAA, and the agency confirmed the problem was found "as part of the ongoing system-wide inspection of Boeing’s 787 shimming processes required by the FAA."

The production flaws "pose no immediate threat to flight safety," the FAA said in its statement, but Boeing "has committed to fix these airplanes" before delivering 787s again. Regulators at the FAA will be using data to decide whether 787s that are in service will need the same work done. 

Boeing revised its estimate of how many undelivered 787 jets it will hand over to customers by the end of the year. Previously, Boeing leaders said the majority of the about 100 Dreamliners sitting in inventory would make their way to customers by the end of 2021. The company said Tuesday fewer than half will be delivered within the year. 

Boeing has declined to give any estimate of how long this current delivery pause will last.

“We will continue to take the necessary time to ensure Boeing airplanes meet the highest quality prior to delivery," the company said. 

The previous five-month hiatus on Dreamliner deliveries had ended in late March, after the FAA had taken over airworthiness checks for four aircraft as one of its "corrective actions" to "address 787 production issues." 

The issues that prompted that pause, like the problem in the nose section, had to do with tiny gaps found in places where parts of the aircraft's fuselage were joined. The gaps were very small, Boeing said, about the width of a human hair, but they didn't mean design specifications, so the company has been working to inspect all 787s and do the necessary rework to fix the issues. 

That work has been split between North Charleston and Boeing's widebody site in Everett, Wash. which had been producing new Dreamliners up until late February of this year. All the 787s assembled in Everett prior to that point are being inspected and fixed by Boeing workers there. 

Boeing's Lowcountry site had been balancing a five-per-month production rate with 787 rework and inspections, but, while Boeing said production will not be stopping entirely, a timeline for when the factory might return to building five aircraft per month wasn't given.

That rate is already greatly reduced from the 787 program's pre-pandemic peak rate of 14 per month. Boeing officials gradually lowered their estimates throughout last year of how many 787s it could keep making a month under the current market conditions and eventually settled on five. 

Boeing handed over 13 Dreamliners in the window between the first and second delivery stoppages. In June, one 787-9 was delivered to Turkish Airlines, bringing the year's total to 14, but that plane was issued its airworthiness certificate before deliveries were paused, and Boeing had been holding the plane for the customer.

The planemaker's second quarter delivery totals, released Tuesday, show how the 787 is lagging behind other jet programs, particularly the narrowbody 737. So far this year, Boeing has delivered 113 of its 737 jets. 

Thanks to the return of 737 Max deliveries, Boeing has by mid-year delivered 156 aircraft in 2021, compared to the 157 jets it delivered during all of 2020, when the Max remained grounded because of its two deadly crashes until mid-November. 

Max jets have also accounted for the majority of both orders and cancellations. Last month, United Airlines agreed to buy 200 Max jets. Another 19 freighters were ordered for a June total of 219 aircraft. Another 73 jet orders were canceled, 72 of which were Max jets, leaving a net total of 146 — Boeing's fifth straight positive net order total. 

The Dreamliner, meanwhile, has secured orders for nine jets this year, and no new orders were logged in June. 

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Boeing cuts 787 production as new structural problem discovered

Reuters 13 July, 2021 - 06:00am

The company now forecasts delivering fewer than half of the lingering 100 or so 787s in its inventory this year - instead of the "vast majority" it had expected - as it continues forensic inspections and costly repairs to address quality flaws in the aircraft.

Boeing did not disclose a new production rate for the 787 program, but said it would shift temporarily below the current rate of five jets per month.

Boeing shares were down 3.2% in early trading.

For the year so far, the company has delivered 156 jets of all types, compared with 157 for all of 2020, it said.

The latest new issue, first reported by Reuters on Monday, involved gaps where components are joined together in a forward pressure bulkhead, the U.S. Federal Aviation Administration said.

The FAA said late on Monday that Boeing, which spotted the problem, would fix it before the planes are delivered.

The U.S. planemaker's 737 MAX and 787 have been afflicted by electrical defects and other issues since late last year, and it only resumed deliveries of the 787 in March after a five-month hiatus.

"We will continue to take the necessary time to ensure Boeing airplanes meet the highest quality prior to delivery," Boeing said.

The FAA said it will review data to "determine whether similar modifications should be made on 787s already in commercial service."

In June, Boeing booked 146 jet orders. That net figure takes into account instances in which the buyer converted an order to another model or canceled it entirely, including 71 737 MAX jets, the company said.

Its backlog increased from 4,121 to 4,166 aircraft, Boeing said.

Boeing handed over 45 planes to customers in June, its highest monthly total since March 2019, when the second of two fatal 737 MAX crashes occurred.

Its June delivery tally includes 10 widebody aircraft, one of which was a 787-9 for Turkish Airlines, Boeing said.

It also delivered 35 737s, including 33 737 MAXs and two P-8 maritime patrol aircraft to the U.S. Navy.

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Boeing cuts 787 Dreamliner production, delivery target after new flaw found

CNBC 12 July, 2021 - 09:57pm

Boeing cut its delivery target for its undelivered 787 Dreamliner planes and said it will temporarily lower production rates after a new defect was detected on some of the wide-body jets.

Boeing said Tuesday it will deliver fewer than half of the Dreamliners it has already produced but has not yet delivered to customers.

CEO Dave Calhoun said at an investor conference last month that the company would deliver the "lion's share" of the roughly 100 Dreamliners in its inventory this year.

Boeing halted deliveries of the wide-body planes in May for the second time in less than a year as the Federal Aviation Administration reviewed the manufacturer's method for evaluating the aircraft. Last year, Boeing first disclosed incorrect spacing in some parts of certain 787 aircraft, including the fuselage, halting deliveries for five months.

The FAA said Monday the latest issue was related to that and was detected "near the nose" of certain 787 Dreamliners that Boeing has manufactured but not delivered.

Because most of an aircraft's price is paid when the plane is handed over to customers, further delivery delays would mean more financial strain for Boeing. The company is trying to regain its footing in the wake of the coronavirus pandemic and two fatal crashes that grounded its best-selling 737 Max .

Boeing shares were down about 2% in morning trading, weighing on the Dow Jones Industrial Average.

"This issue was discovered as part of the ongoing system-wide inspection of Boeing's 787 shimming processes required by the FAA," the agency said. "Although the issue poses no immediate threat to flight safety, Boeing has committed to fix these airplanes before resuming deliveries."

Boeing said it would reduce production to fewer than the current rate of five planes a month for a few weeks but declined to say by how much. Boeing will reassign staff on the production line to inspect planes and make any necessary repairs.

"Based on data, the FAA will determine whether similar modifications should be made on 787s already in commercial service," the FAA said.

Boeing also said Tuesday it delivered 45 planes last month, 33 of them 737 Maxes. In the first half of the year the company handed over 156 planes, one fewer than its total for all of 2020, when coronavirus devastated the industry.

Net orders for the month totaled 146 planes, while gross orders of 219 were the highest in two years.

Those included an order for 200 Maxes to United Airlines, which the carrier announced last month along with an order for 70 Airbus narrow-body planes.

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FAA says new Boeing production problem found in undelivered 787 Dreamliners

Yahoo Finance 12 July, 2021 - 09:07pm

WASHINGTON/SEATTLE (Reuters) - The Federal Aviation Administration (FAA) said late on Monday that some undelivered Boeing 787 Dreamliners have a new manufacturing quality issue that the largest U.S. planemaker will fix before the planes will be delivered.

The FAA said the issue is "near the nose on certain 787 Dreamliners in the company's inventory of undelivered airplanes. This issue was discovered as part of the ongoing system-wide inspection of Boeing's 787 shimming processes required by the FAA."

The FAA added that "although the issue poses no immediate threat to flight safety, Boeing has committed to fix these airplanes before resuming deliveries." The air regulators added after a review of data it "will determine whether similar modifications should be made on 787s already in commercial service."

Boeing declined to comment. Reuters first reported the new production issue to hit Boeing's troubled 787 Dreamliner. The company has about 100 undelivered 787s in inventory.

Boeing suspended deliveries of the 787 in late May after the FAA raised concerns about its proposed inspection method, saying it was "waiting for additional data from Boeing before determining whether the company's solution meets safety regulations."

The FAA in May had issued two airworthiness directives to address production issues for in-service airplanes.

The U.S. planemaker's 737 MAX and 787 have been afflicted by electrical and other issues since late last year, and it had only resumed deliveries of the 787s in March after a five-month hiatus - only to halt them again in May.

Two key U.S. lawmakers said in May they were seeking records from Boeing and the FAA on production issues involving the 737 MAX and 787 Dreamliner.

The FAA said in September it was investigating manufacturing flaws involving some 787 Dreamliners. Boeing said in August airlines operating its 787 Dreamliners removed eight jets from service as a result of two distinct manufacturing issues.

In September, Boeing said some 787 airplanes had shims that were not the proper size, and some airplanes had areas that did not meet skin-flatness specifications.

Last month at a conference, Boeing Chief Executive Dave Calhoun said the 787s were "performing beautifully."

But he added "the FAA rightfully wants to know more about the analytics and process controls that we put in place, which are different than the ones that we had previously, so that we could be more perfect."

Calhoun said he hoped the FAA's review of Boeing's approach was "measured in months and not longer than the calendar year."

In February, Reuters reported Boeing was beginning painstaking repairs and forensic inspections to fix structural integrity flaws embedded deep inside at least 88 parked 787s.

The fuel-efficient 787 has been a hit with airlines, which have ordered nearly 1,900 of the advanced twin-aisle jet worth nearly $150 billion at list prices.

The FAA has been critical of some Boeing safety practices in recent years and imposed a $6.6 million fine on Boeing in February for failing to comply with a 2015 safety agreement.

The agency did not allow the Boeing 737 MAX to resume flights for nearly 20 months following two fatal crashes and only after it added significant safeguards to a key system.

Last month, Reuters reported the FAA told Boeing in May its planned 777X was not yet ready for a significant certification step and warned it "realistically" will not certify the airplane until mid- to late 2023.

(Reporting by David Shepardson and Eric M. Johnson; Editing by Shri Navaratnam and Christopher Cushing)

Boeing will temporarily reduce production of the 787 Dreamliner plane after identifying a new issue with the jet during inspections, the company announced Tuesday.

(Bloomberg) -- Boeing Co. slumped after the planemaker said it would deliver fewer 787 Dreamliners this year than originally planned as its mechanics expand their inspections for tiny structural flaws in the jets amid a temporary grounding.The Chicago-based planemaker now expects to hand over fewer than half of the 100 or so Dreamliners stashed in the desert and around its factories, Boeing said in a statement Tuesday. Executives had previously said a majority of the 787 jets in inventory would

(Bloomberg) -- Boeing Co. has uncovered an additional manufacturing problem with its 787 Dreamliner, according to a person familiar with the matter, as it works with U.S. regulators to restart deliveries of the beleaguered jet.The issue pertains to wrinkling in the forward pressure bulkhead in the jets’ noses, the person said, asking not to be identified because the details are private. The defect isn’t considered a threat to flight safety, the person said.Boeing has halted deliveries of the adv

(BA) stock slipped in premarket trading on Tuesday, as the plane maker cut its delivery target for 787 Dreamliner planes after discovering a production defect. The aerospace giant halted deliveries of 787 Dreamliners in May after the Federal Aviation Administration said it needed more information on the company’s planned method for inspecting the jets. Boeing said on Tuesday that it has subsequently found “additional rework” that will be required on undelivered 787 jets.

SEATTLE (Reuters) -Boeing Co said on Tuesday it would cut its 787 production rate as it works through a new production-related structural defect in its troubled twin-aisle airliner program. Boeing did not disclose a new production rate for the 787 program, but said it would shift temporarily below the current rate of five jets per month. Boeing shares were down 3.2% in early trading.

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