Boeing Sees a Struggle Moving Earlier Issue-Laden 787s

Boeing

Boeing (NYSE:BA) may have only seen the beginning of its 787 problems with the battery fires and various tech glitches that were experienced by a slew of different airlines, because now, since those problems have come and gone, Boeing is sitting on a $1.1 billion pile of the jets that it hasn’t been able to sell since two airlines dropped its orders for the earlier generation planes after the issues occurred.

The planes are heavier than the current models, have a shorter flying range, and are only partially completed, Bloomberg reported. The planes have been parked at Boeing’s Seattle facility for about four years now, and in place of the engines, 17,000-pound weights hang from the wings to keep them balanced. In the automotive industry, these would be called “project cars.”

Sources told Bloomberg that the unfinished planes — which Boeing started building in 2011, prior to receiving U.S. certification — are apart of a burgeoning inventory that Boeing has had to update and make repairs to in order to keep the planes up to par with federal regulation standards. It added that Boeing is starting the upgrading of the last of the 787s to be fixed, as it puts more emphasis on its sales efforts.

Richard Aboulafia, an aerospace analyst for Teal Group, said that the “diversion of personnel and resources needed to deal with unprofitable aircraft is … a commentary on plans gone badly wrong.” Even since the beginning, Boeing’s 787 program was hit with delays amounting to three or so years; the 787 is the first aircraft to largely use composite materials to save weight and boost efficiency.

Boeing 787

The new carbon fiber components, lithium ion batteries, onboard systems, and a manufacturing process that relied more heavily on suppliers all put crimps in Boeing’s manufacturing process for the plane, Bloomberg added.

However, these earlier models of the 787 — which Boeing internally calls the “terrible teens” due to the manufacturing headaches it caused — are somewhat different than the models it is peddling to airlines today. Bloomberg said that the teens weigh more, and are loaded with “custom-fitted reinforcements and needed the most work among the more early Dreamliners that required post-assembly modifications.”

“We are actively marketing those airplanes and have several available opportunities,” Boeing spokesperson Doug Alder told Bloomberg, though he didn’t go into details. Malaysian, Middle Eastern, and South American carriers have been approached by the company, however.

The company will likely find its best bets lie with small, bargain operators that fly shorter, heavily trafficked routes. “Asia seems like exactly the right place,” said George Ferguson, who is a senior analyst with Bloomberg Industries, especially if Boeing targeted sales to potential customers of the re-engined A330 contemplated by Airbus Group NV, Bloomberg said. “You can see it as a competitor to the A330.”

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