Boeing HQ
Today, attention refocused on Boeing problems, including the engine mount defect on the 777-X that has brought certification testing to a halt and a likely return to the drawing board to strengthen the severed part and other parts found with cracks on other aircraft. This will likely impact the certification timetable for the new aircraft, pushing certification back into 2026 and in a worst case scenario, 2027. Â
Meanwhile, a pilots seat issue that resulted in a drop on a LATAM 787 flight has resulted in a mandatory inspection by the FAA, due within 30 days. Mabrian published their estimate that the inspections on 895 aircraft could potentially impact 64,000 flights, causing havoc for airlines during a busy summer month. While that estimate seems high to us, there will certainly be an impact on airlines and their schedules, as it is unlikely that all inspections could be completed during aircraft down time between flights. That will also be expensive for Boeing.
These two events that emerged yesterday will be the first tests for Kelly Ortberg and an opportunity for Boeing to demonstrate the cultural changes and improved transparency as it deals with multiple simultaneous problems with now two new ones added on. These events will also put additional pressure on cash flow and the company’s stock price. It will be interesting to watch how the company reacts to the forthcoming financial crisis as it faces settlement of the Embraer arbitration, the acquisition of Spirit, and the labor negotiations with the IAM that will likely result in significantly higher labor costs. The company is likely to rue the decision to repurchase stock in amounts that could have fully funded two new aircraft programs and left the company without an adequate cash cushion.
The impact of the 777-X delay is already being felt as Emirates, who had hoped to be flying the 777-9 by now, has just purchased four Airbus A380 aircraft from a lessor to ensure adequate lift as the industry continues to recover from the global pandemic with high demand. Emirates, in a nutshell, needs lift, and needs to find more as long as Boeing can’t deliver on their promises. With the 777-9 likely now delayed into 2026-2027, there will be a number of very upset customers looking for compensation.
On the legal front, it appears the judge who vacated a jury award was actively trading Boeing stock during the trial. Could this mean a vacated judgement and re-trial? Stay tuned.
Finally, the international press is unrelenting in its reporting on Starliner, with papers in India now talking about too steep a re-entry angle burning the ship, too shallow an angle stranding the astronauts in space, or a thruster failure, leaving the astronauts in need of a quick rescue with only about 96 hours of power and oxygen on board. All of these worst case scenarios are quite unlikely, but since the environment in space cannot easily be simulated on earth, the risk cannot be eliminated or mitigated with full certainty. This will remain a PR nightmare for Boeing, and embarrassing if the astronauts are forced to return via a competing SpaceX capsule.
Links to today’s key stories follow:
- FAA Boeing 787 inspections could impact 64,000 flights, according to Mabrian – Aviation Business News
- Dubai’s Emirates to buy 5 Airbus aircraft from plane lessor Nimrod Air Two – Gulf News
- Boeing stock slides following continued engineering setbacks – FXStreet
- A judge who overturned a $72 million verdict against Boeing disclosed he bought and sold Boeing stock while hearing the case… – Business Insider
- Astronauts Sunita Williams and Barry Wilmore’s return: Ex-US Army space commander shares 3 dangerous scenarios – The Indian Express
