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Boeing halts 787 Dreamliner deliveries due to non-compliance issue

Boeing halts 787 Dreamliner deliveries due to non-compliance issue

 

Boeing Co (NYSE: BA) has temporarily paused the delivery of its 787 Dreamliner aircraft after discovering a non-compliance issue. Since January 26, the company has not delivered any of its wide-body jets. In response, the Federal Aviation Administration (FAA) has confirmed that the deliveries will only resume once the regulator is satisfied that the issue has been resolved. As a result, the company’s shares have fallen by 2.9% in pre-open trading on Friday.

Boeing has attributed the issue to “an analysis error by our supplier related to the 787 forward pressure bulkhead.” The company believes that the problem will not affect the full-year 2023 delivery and production plan. While the FAA has stated that there is no immediate safety or flight concern for the in-service fleet, the regulator is working with Boeing to determine whether any actions are required for recently delivered airplanes.

Wolfe Research analysts have characterized the deliveries halt as “another bump on the road to recovery.” However, they have also indicated that they see buyer interest in response to the weakness. Morgan Stanley analysts have reiterated their equal-weight rating and cautioned that the recent issue highlights the regulatory risks that remain for Boeing.

Although Boeing has insisted that there will be no impact on the full-year 2023 delivery and production plan, the short-term deliveries will be affected. The 787 Dreamliner is a significant part of the company’s commercial aircraft revenue, and any delivery delay could impact the company’s revenue.

The 787 Dreamliner program has faced several setbacks in recent years, including production issues, quality control problems, and delays. These issues have resulted in significant costs for the company, with the company taking a $6.5 billion charge in 2020 due to the program’s issues. The deliveries halt is yet another setback for the program, which is still recovering from the pandemic’s impact.

The recent non-compliance issue highlights the regulatory risks that Boeing still faces. Following the 2018 and 2019 crashes of its 737 Max planes, which resulted in the deaths of 346 people, the company has faced significant regulatory scrutiny. The company has since made significant changes to its safety procedures and management, but the recent issue suggests that regulatory risks remain a concern.

In conclusion, the deliveries halt of the 787 Dreamliner is a significant setback for Boeing’s recovery efforts. The recent non-compliance issue underscores the regulatory risks that the company still faces. It remains to be seen how the company will address these issues going forward.

 

Author
Alice Scott is a prolific author with a keen interest in the stock market. As a writer for Livemarkets.com, she specializes in covering breaking news, market trends, and analysis on various stocks. With years of experience and expertise in the financial industry, Alice has developed a unique perspective that allows her to provide insightful and informative content to her readers.