How Long Until Boeing’s Dreamliner is Ready to Fly?
Boeing (NYSE:BA) closed the regular session on Wednesday at $76.29, down 1.53 percent for the year but up 2.85 percent over the past five trading days. The company’s stock has been pushed and pulled by the various catalysts — mostly negative — surrounding the investigation into the lithium ion battery on board its flagship 787 Dreamliner aircraft.
The Emergency Air Worthiness Directive issued by the Federal Aviation Administration on January 16 quickly led to fleets of the aircraft being grounded around the world. It’s old-hat by now, but the investigation remains a tremendous liability for the company. Boeing has had orders for nearly 850 Dreamliners, only 49 of which have been delivered so far, and the investigation threatens to delay production.
Boeing can’t transport new aircraft away from its final assembly facility until the investigation is complete and the Federal Aviation Administration lifts the grounding policy, and it’s unclear how long that will take. Deborah Hersman from the National Transportation Safety Board says that identification of the problem is “probably weeks away.”
Last week, Boeing asked the FAA for clearance to conduct test flights of the aircraft, indicating that the company potentially had a lead on the so-far elusive battery issue. The Seattle Times, citing sources with knowledge of the matter, suggests that test flights could be conducted as early as this week. If all goes well, there is a chance that the aircraft could return to commercial operation by the end of the month, more or less on the same timeline offered by the NTSB.
The timeline is highly speculative, but it does strike an optimistic note for both the company and investors who have a material reason to fear every increase in the duration of the investigation. Japan Airlines and All Nippon Airways, which own a combined 24 Dreamliners, have expressed that they will seek compensation for costs related to keeping the aircraft grounded. Japan Airlines expects a 700 million yen ($7.54 million) impact on its earnings for the current quarter because of the ordeal.
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