Will Boeing Be Forced to Delay Dreamliner Deliveries?

BoeingBoeing (NYSE:BA) faced some selling pressure on Friday afternoon as more bad news piled up surrounding the ongoing investigation into the 787 Dreamliner. Reports indicate that the aerospace-manufacturer has told two European airlines, originally scheduled to receive Dreamliner shipments in the coming months, that deliveries will be delayed as a result of the investigation.

The emergency air-worthiness directive issued by the Federal Aviation Administration on January 16 grounded the aircraft in the U.S., and subsequently nations around the world all grounded their fleets. In total, there are about 50 delivered Dreamliners that cannot fly, and as many as 10 more sitting on the runway outside of Boeing’s final assembly facility in Washington state.

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The two airlines immediately affected are Britain’s Thomson Airways and Norwegian Air Shuttle, both of which will seek interim solutions to problems caused by the delay. Both airlines had planned new routes to go with their receipt of the new aircraft, and will likely lease aircraft to fill in while the investigation drags on…

The issue with the lithium-ion battery on board the Dreamliner remains elusive and National Transportation Safety Board officials have said that identification of the problem could still be weeks away. Reports indicate that Boeing has possibly identified the problem — a series of short circuits within a single cell of the battery that caused over heating — but it’s unclear if this is the only issue.

On the table is the entire certification architecture that the FAA uses to deem aircraft worthy for flight. Identifying and “fixing” the problem is only as good as the regulators who verify that the fix is effective. As it stands, there’s not a lot of confidence in that system. Boeing will not only have to fix the problem, but prove beyond a doubt to regulators and the public that it has done so.

With test flights ordered, Boeing is edging ever closer to an answer, and investors have stood behind the company through the volatility. Shares are up fractionally this year to date.

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