Federal air safety regulators gutted Boeing Co.
BA 3.28%
s authority to inspect and sign off several newly produced 787 Dreamliners, part of an intensified investigation of manufacturing issues that have halted deliveries of the popular wide-body jets.
The Federal Aviation Administration said its inspectors, instead of those of the aircraft manufacturer, would perform routine security checks on the delivery of four Dreamliners that Boeing has been unable to hand over to its airlines for months as it grapples with several quality issues.
The agency has long empowered Boeing to conduct the latest safety signals on behalf of the FAA, enabling it to issue so-called airworthiness certificates needed to hand over new jets to airlines. The FAA said it has withheld the same authority on some aircraft in previous years to keep inspectors’ skills up to date.
Now, the FAA said its attempt to deny the authority for final approval was part of a wider series of actions targeting Boeing’s 787 manufacturing problems. A spokesperson said the agency could decide to have its own inspectors sign on more Dreamliners. “We can expand retention to other 787 aircraft if we see the need,” he said.
A Boeing spokesperson said on Wednesday that the company has engaged the FAA in its efforts to resume Dreamliner deliveries and that it would follow the agency’s guidelines regarding final approvals, as in the past. The spokesman said Boeing was “encouraged by the progress our team is making” in restarting deliveries.
After discontinuing deliveries in October, Boeing has built up a stock of more than 80 newly produced, undelivered Dreamliners, according to aviation consultancy Ascend by Cirium. Boeing has said it expects to resume deliveries in late March.
The wide-body jets have an excellent safety record and are used extensively on international routes. Boeing learned of the FAA’s decision in January and has already incorporated the FAA’s signatures into its expected delivery schedule, a person familiar with Boeing’s schedule said.
Among the specific aircraft to be definitively approved by agency inspectors are two Dreamliners ordered by United Airlines Holdings Inc.
United expects to receive the planes in late March or early April, a person familiar with the Chicago-based airline’s plans said this week.
The Boeing spokesperson said the manufacturer would adjust its delivery plans as needed so that it can take the time to conduct comprehensive 787 inspections “to ensure they all meet our rigorous technical specifications.”
The suspension of deliveries has cut off a significant source of cash paid by customers as the aircraft manufacturer navigates the Covid-19 pandemic and weak demand in global air travel. Bernstein analyst Doug Harned has estimated that the delay in Dreamliner Boeing’s delivery could cost up to $ 8 billion in cash flow in 2020 and 2021. He expects half of that to be recouped next year when airlines receive delivery and pay the rest of the costs.
Boeing said in January that it would likely continue to burn cash this year, but has ample liquidity after raising billions of dollars in debt last year. Investors’ optimism about the broader travel recovery helped its shares jump 21% last week. The stock gained another 3.3% on Wednesday, valuing Boeing at $ 149 billion.
While the scope of the FAA is limited, the FAA’s movement on the Dreamliner is similar to a step the agency took after two crashes of Boeing 737 MAX jets that killed 346 people in 2018 and 2019.
The FAA stripped Boeing of the authority to conduct pre-delivery security checks on MAX jets in late 2019. At the time, a faulty flight control system and production-related missteps with that aircraft were placed under the scrutiny of Congress and regulatory agencies. The FAA approved the 737 MAX to resume passenger flights last year.
The Dreamliner failure is one of the quality issues that Boeing has faced in recent years in its commercial, defense and space programs.
Many of the 787’s quality issues involve small openings where parts of the jet’s fuselage, or the body of the aircraft, converge. Problems have surfaced in other places as well, including the vertical fin and horizontal stabilizer at the tail, according to a March 12 FAA summary of the agency’s regulatory action, viewed by The Wall Street Journal.
Boeing has previously revealed problems with a factory process used to make small shims – materials used to fill in the small gaps where the airplane sections join together. Such holes could potentially lead to premature fatigue of certain areas of the aircraft, potentially requiring extensive repairs during long-term routine maintenance.
In the summary, the agency said it would retain its Dreamliner approval authority “until it is confirmed that all shimming issues have been resolved and aircraft conform to the FAA-approved design.”
Write to Andrew Tangel at [email protected]
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