Boeing cuts production on the 787 to address flaw

Tuesday, July 13, 2021 | David Koenig, AP Airlines Writer


In this Oct. 28, 2020 file photo, a motorcyclist cruises past the Renton, Wash., Boeing plant where 737's are built. Boeing is temporarily lowering its delivery target for the 787 Dreamliner after discovering additional work that will need to be performed on the aircraft. The company said Tuesday, July 13, 2021, that the 787 production rate will temporarily be lower than five per month and will gradually return to that rate. (Ellen M. Banner/The Seattle Times via AP, File)

Boeing will cut production of its large 787 airliner for several weeks after discovering a new structural flaw in some planes that have been built but not delivered to airline customers.

The aircraft maker said Tuesday that it now anticipates that it will deliver less than half of the 787s remaining in its inventory this year. That is a retreat from CEO David Calhoun's statement last month that the company hoped to deliver a majority of the planes, estimated at about 100, in 2021.

A decline in deliveries will hurt Boeing's cash flow because the company gets a large portion of the price of a plane upon delivery.

Shares of Chicago-based Boeing Co. fell more than 4%.

Boeing had been producing five 787s per month. It did not disclose the temporary lower rate.

“We will continue to take the necessary time to ensure Boeing airplanes meet the highest quality prior to delivery,” the company said in a prepared statement. “Across the enterprise, our teams remain focused on safety and integrity as we drive stability, first-time quality and productivity in our operations.”

The Federal Aviation Administration said the new problem near the nose of some undelivered 787s “poses no immediate threat to flight safety. The FAA said that it will decide later whether any changes are needed to 787s that airlines are already using.

Demand for long-haul planes like the 787 has been hurt by a sharp drop in international travel since the beginning of the pandemic, and the new defect is another setback for Boeing's popular two-aisle plane.

Deliveries of 787s were halted in 2020 and again in May to fix production flaws that left tiny gaps — measured in thousandths of an inch but exceeding the engineering specifications, according to Boeing — where pieces of the carbon-fiber fuselage are joined. Also, the FAA has not yet approved a method for inspecting the planes.

Members of Congress have sought records from Boeing and the FAA about production problems on the 787 and the 737 Max.

The new problem was found on a part called the forward pressure bulkhead, a dome-shaped structure in the nose that keeps the plane's interior pressurized.

Boeing disclosed the latest issue with the 787 as it announced orders and deliveries for June, which were boosted by a huge order from United Airlines.

Boeing reported 219 orders, including United’s order of 200 737 Max jets, which are smaller than 787s. That is the highest monthly order total since June 2018. However, orders for 73 planes were canceled, 65 of them by Middle Eastern carrier flydubai.

The company said it delivered 45 planes last month, the highest total since March 2019, when Max jets were grounded worldwide and deliveries were halted after two deadly crashes. The Max resumed flying late last year after Boeing made changes to a flight-control system that played a role in the accidents.

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David Koenig can be reached at www.twitter.com/airlinewriter

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CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
The Boeing (BA)2.1$226.63-1.1%N/A-14.75Buy$259.98
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