Boeing, FAA desperate for 787 Dreamliner fix
(Moneywatch) With a possible strike by Boeing engineers looming, the company and the Federal Aviation Agency are doing a full-court press to get the company's grounded 787 Dreamliner fixed and back into the skies as soon as possible.
On Thursday, the same day the 787s were grounded worldwide, Boeing said it would continue building the plane even though no one has determined what is causing problems with its critical lithium ion batteries. Today, Japanese officials said they were under pressure from the FAA and their own government to wrap up their investigation as soon as possible.
Hideyo Kosugi, one of five Japan Transportation Safety Board investigators inspecting the grounded jet, told the Wall Street Journal that visiting U.S. aviation officials made it clear "they are sensing pressure at home to clarify the cause of the incident quickly, just as we are feeling the same attention from Tokyo."
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Boeing's newest jet was grounded worldwide after one suffered a battery fire and another had to make an emergency landing because pilots smelled something burning. Airlines and regulators canceled all Dreamliner flights.
It's not clear how long the investigation -- or the fix -- will take. But it won't be cheap for Boeing. Analysts estimate that it will cost the company at least $125 million a month to compensate the seven airlines flying to 787 for its downtime.
"It seems clear to us that the company is heavily focused on proving out the design of the current batteries, which they have continued confidence in," Carter Copeland, an aerospace analyst for Barclays, wrote in a note to investors. "Obviously, extended groundings (weeks or months) would change this assessment but this isn't yet what we expect. BA is diverting engineering resources to address the issue already, in an effort to minimize delays."
All this is happening as Boeing is facing a possible strike by all of its engineers. On Friday, the Society of Professional Engineering Employees in Aerospace told members to reject the company's best-and- final contract offer. The union has said it expects the vote on the contract to happen within weeks. It also said that vote will likely include a request for a strike authorization because the company's latest proposal puts retirement benefits at risk.
The Dreamliner is already over budget and came into service three-and-a-half years behind schedule. As a result, the 787 has been costing the company much more than expected. That was expected to change as efficiencies of scale kicked in from increased production. More finished planes would also mean more deliveries and income from buyers. Boeing has not said whether it is sticking to its plan of doubling production to 10 a month by the end of this year.
