The US government is closed, but you wouldn’t know it by going to your local airport. TSA screeners are still checking bags, the control towers and FAA are still guiding aircraft safely to their destinations, and business travelers and tourists are going about their business as if nothing has happened. But behind the scenes, there could be a significant impact.
Out in Everett (Washington) and in Charleston (South Carolina), concerns are growing, as the FAA indicated yesterday that it will furlough 15,500 of its 46,000 employees. Many of those employees being furloughed are involved in aircraft certification, and could end up delaying deliveries of new airplanes, including the 787 Dreamliner, as those folks will not be there to “sign off” on the new aircraft.
In Everett certification efforts are in the critical flight testing phase for the 787-9, with the aircraft approaching scheduled entry into service in 2014. A lengthy government shutdown could delay certification, pushing back entry into service and impacting airline fleet plans. In Charleston, which being a new facility does not yet have the same levels of delegated authority as Everett, production could be slowed because the FAA has retained some elements of the certification process, and won’t have personnel to complete those tasks. The 787 program needs no further delays.
Fortunately, older models, like the 737, will not be significantly impacted by the shutdown, as the FAA has already delegated approvals to Boeing, whose employees are not impacted by the shutdown.
While Boeing and its customers are working on contingency plans, it appears that the government shutdown, if lengthy, could have a significant impact on the 787 program, delaying the 787-9 and reducing output from the Charleston, South Carolina plant. That will, of course, negatively impact Boeing’s cash flow and 4th quarter profitability.
