Does This News Mean Clear Skies Ahead for Boeing?
While Boeing (NYSE:BA) waits for its high-tech jumbo jets to get off the ground, the company will brace itself for a slowdown in production on other key members of its aircraft fleet. Boeing released a statement this morning regarding the downshift in 747-8 aircraft production as the FAA looks over its compliance statements on the grounded Dreamliner fleet, still unable to fly, at great expense to all parties concerned.
There was no clear timeline as to when the Dreamliner could make it back into the air. According to reports, Boeing has already submitted documents explaining its fix for the defective lithium batteries that came with the original Dreamliner roll-out. The FAA will review them — possibly as early as next week — before deciding the batteries are safe to use in the Dreamliner 787 waiting on runways throughout the world.
This development was positive for Boeing, which had to admit that production of other key elements of its fleet would slow in the coming months. According to the company statement, plants will produce 1.75 planes per month for the foreseeable future, a drop from the scheduled two planes a month. Nonetheless, the company remained optimistic that production would resume at a higher pace in 2014…
Boeing is betting that its quieter,significantly more efficient 747-8 series will command the position in the industry it justifiably expected. Among the innovations of the 747-8 series, the improvement of more than 10 percent in fuel efficiency is a highlight Boeing is betting will sell planes. The company expects there will be little financial impact overall, apart from the estimated $600 million lost from the Dreamliner malfunctions.
As for the Dreamliner, simply getting the plane into the skies is the goal. Since the January grounding, airlines have been forced to look to alternative aircraft, which has been costly for Boeing. Nippon Airways and Japan Airlines were affected the most, together claiming nearly half the Dreamliners in operation. Once the FAA reviews the compliance statement, it will have to approve a service bulletin and then could allow Boeing’s planes to fly. Nippon and JA planes would be the first to receive the fix. United (NYSE:UAL), one of the American providers with Dreamliners on the ground, would follow.
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