Costs Grow for Grounded Boeing Fleet

BoeingShares of Boeing (NYSE:BA) shed about 1.2 percent on Tuesday morning after a long market weekend filled investors with pessimism. Battery issues with the 787 Dreamliner remain unsolved, meaning fleets around the world are grounded until at least the end of January. Shares of Boeing are off 2.6 percent since the New Year, and the cost to affected carriers such as United Air Lines (NYSE:UAL) is building.

Reports indicate that the cost of keeping a 787 on the ground for All Nippon Airways, a Japanese carrier with 17 Dreamliners, is an estimated $1.1 million per day. For Boeing, if the issue is not contained to just the battery unit, it could force a larger re-design of the electrical system that would cause further delays.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

The situation with the 787 has revitalized questions about the FAA, its ability to keep up with the market, and its relationship with manufacturers. The old and ubiquitous argument that the complexity of technology will consistently outpace inspectors suggests that there will always be some risk. Combined with a global supply chain, regulators have an impossible job maintaining oversight. This means that some errors, or “growing pains,” always get through the certification process.

More Articles About:   , , ,