News Column

Boeing: 787 Production Will Continue as Planned

Jan. 18, 2013

Brendan Kearney

Boeing said 787s will keep rolling along the assembly line, including in North Charleston, while it works to get the planes grounded by regulators back flying again.

Boeing's newest, flashiest jet was grounded worldwide Wednesday after one plane suffered a battery fire last week and another made an emergency landing because pilots detected a burning smell on Wednesday.

The two incidents prompted airlines and regulators around the world to ground the 50 787s in service until a fix for the battery problem is found that satisfies the U.S. Federal Aviation Administration.

It's too early to know how long the investigation -- or the fix -- might take, analysts said.

"Sadly, this is a case of 'how long is a piece of string' when it comes to how long the 787 grounding will last for," Saj Ahmad, London-based analyst with strategicaeroresearch.com, wrote in an email. "There simply is no clear answer at this juncture."

What is clear is that it won't be cheap for Boeing.

There's the extra work to correct the problems, and if deliveries are delayed, that means Boeing will have to wait to get paid.

"We continue to work with the FAA on our go-forward plan on deliveries," Boeing South Carolina spokeswoman Candy Eslinger wrote in an email.

The complex by Charleston International Airport rolled out its seventh plane within the past week. Four local jets have been delivered to Air India; three more planes sit on the South Aviation Avenue flight line.

Between Tuesday's close and Wednesday's opening, Boeing's stock dropped from almost $77 per share to below $74 per share. It had rebounded somewhat Thursday, but not before Carter Leake, who covers the aerospace and defense industries for BB&T Capital Markets, downgraded it for the second time in two weeks.

In a report to investors, Leake wrote that electrical problems are tricky to fix, suggested that deliveries could be delayed in the near term and concluded that "recent events have the risk in owning Boeing stock for the next three months far outweighing the rewards."

Meanwhile, airlines that had sought the prestige of flying the world's most sophisticated plane are instead stuck with one they can't use.

Poland's airline LOT said Thursday it may seek compensation from Boeing Co. for the grounding of its two 787 Dreamliners. The airline suffered the highest-profile embarrassment of any of Boeing's customers Wednesday night, when it was showing off new service between Warsaw and Chicago.

The plane's captain learned of the FAA grounding order while the flight was on its way from Warsaw to Chicago. The airline had to cancel the return trip -- and a ceremony at O'Hare that was to include airline officials and Mayor Rahm Emanuel.

Passengers who were eager to ride the airline's first flight back to Warsaw ended up looking for a hotel room instead.

The reaction from local fliers has been mixed, with some defending the 787's early-service problems and others hanging back.

Andy Werner, who identified himself as a 63-year-old North Charleston resident in an email, said he had "no interest in flying the 'Dreamliner' until it has proven itself in service for 5 years or longer."

"In a nut shell you can not have fires in the air," Werner wrote.

Boeing builds five 787s every month, including about one per month in North Charleston. The plan has been to double that production rate by the end of this year.

Boeing still has almost 800 orders for the plane, but hasn't delivered any since Jan. 3, before the first fire. Boeing 787 program spokeswoman Lori Gunter said no deliveries were scheduled during that time. She declined to talk about planned deliveries.

All Nippon Airways said its 18th 787 is due at the end of this month, but it won't take delivery until the 787 flights resume.

"Boeing has been severely damaged from a PR perspective -- there's no question of that," Ahmad wrote. "It's how they manage this going forward and until we know what's happening, it's difficult for them to either reassure or contradict the wave of fear or questions out there about the 787."

The Associated Press contributed to this report.



Source: (c)2013 The Post and Courier (Charleston, S.C.). Distributed by MCT Information Services.