BOEING: Announces US$4 billion loss due to aircraft production flaws

Yesterday, Wednesday 26, Boeing, the manufacturer of the 737 MAX and the 787 Dreamliner announced a US$4.16 billion loss for the 4th quarter. Production issues with the popular 787 Dreamliner have forced Boeing to compensate airlines for losses due to groundings, of delays in plane deliveries.

The Dreamliner has been subject to a range of production difficulties, the rectification of which has delayed deliveries. These are expected to add US$2 billion of costs, which is double the original projections.

Problems started with the 787 Dreamliner way back in 2013 when it was grounded for 2 months due to overheating lithium-ion batteries, requiring a design page and retro fitting repairs. In 2020, again deliveries were delayed due to production flaws, including gaps where panels of carbon composite were joined. No sooner were deliveries resumed, than other faults were discovered. Deliveries continue to be held up, mainly due to one supplier’s faulty titanium parts. Boeing has suggested a number of fixes, but none has been approved by the Federal Aviation Administration (FAA).

The delay in deliveries is causing customers like American Airlines to drop some international flights.

All this is causing penalties for missed delivery slots to be paid to airlines by Boeing, contributing to the recorded losses.

2PAXfly Takeout

This is another timely reminder to wear your seatbelt when seated. Holding you close to your seat will protect you from the sort of injuries sustained on this flight, when unsecured passengers flew to the ceiling of the aircraft, and then came crashing down once the ‘drop’ ceased.

The hope will be that this is an anomaly – a ‘freak accident’ in casual parlance. If it is a systemic error either mechanical or electronic, then this is a larger concern for the airlines that fly Boeing Dreamliner 787 aircraft. Let’s hope it isn’t. If it is, it will pile on the woes to Boeing’s existing stack.

Boeing is losing the aircraft manufacturing wars to its rival Airbus. Reputedly, equivalent Airbus manufactured planes are more expensive than those from Boeing, but at the moment (and that could change), are more reliable and not subject to these production-related delays.

Boeing used to be seen as an engineering-led company, with an excellent reputation for bringing exceptional aircraft to market in record time. The creation of the 747 is an excellent example (links to 2 excellent documentaries below). Now the reputation of the no longer engineering-led company is tarnished by the issues with the 737 and 787.

I am surprised that Boeing with these issues, losses and the global pandemic has survived at all, so if they have come this far, presumably they can come out the other side of this.